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Qing-Yun Jiang

Court Delay and Law Enforcement in China


GABLER EDITION WISSENSCHAFT
Okonomische Analyse des Rechts
Herausgegeben von
Professor Dr. Peter Behrens
Professor Dr. Manfred Holler
Professor Dr. Claus Ott
Professor Dr. Hans-Bernd Schafer (schriftfuhrend)
Professor Dr. Rainer Walz
Universitat Hamburg, Fachbereich Rechtswissenschaft II

Die okonomische Analyse des Rechts untersucht Rechtsnormen auf


ihre gesellschaftlichen Folgewirkungen und bedient sich dabei des
methodischen Instrumentariums der Wirtschaftswissenschaften, ins-
besondere der Mikrookonomie, der Neuen Institutionen- und Konsti-
tutionenokonomie. Sie ist ein interdisziplinares Forschungsgebiet, in
dem sowohl Rechtswissenschaftler als auch Wirtschaftswissen-
schaftler tatig sind und das zu wesentlichen neuen Erkenntnissen
iiber Funktion und Wirkungen von Rechtsnormen gefuhrt hat.

Die Schriftenreihe enthalt Monographien zu verschiedenen Rechts-


gebieten und Rechtsentwicklungen. Sie behandelt Fragestellungen
aus den Bereichen Wi rtsc hafts re cht, Vertragsrecht, Haftungsrecht,
Sachenrecht und verwaltungsrechtliche Regulierung.
Qing-Yun Jiang

Court Delay and


Law Enforcement in China
Civil process and economic perspective

With a foreword by Prof. Dr. Hans-Bernd Schafer

Deutscher Universitats-Verlag
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Dissertation Universitat Hamburg, 2005

1. Auflage Januar2006

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Foreword V

Foreword

Qing-Yun Jiang was born in Fujian, China. He studied International Business Administration
at the Shanghai Institute of Foreign Trade in Shanghai, where he graduated with a Bachelor
of Economics. In 1997, he started studying at the University of Hamburg. After his Master
study and his successful completion of the necessary law examinations, he was admitted as a
doctoral student in the law faculty in 2001. In addition to his study of German civil, criminal
and administrative laws, Jiang demonstrated an increasing interest in law and economics,
especially in the relationship between law and economic development.

It is now a well-established fact that the rule of law, the protection of property rights and a
swift and timely resolution to conflicts are corner stones of economic development and
long-term economic growth. In many developing countries court delays are a major
shortcoming of the legal system. This is true for countries in Latin America and in many
Asian countries. Empirical findings show a 15 year length of civil procedure from the first
filing of the case to the Supreme Court decision. This leads to court crises in the sense that
private disputes are not brought to the court. Private parties attempt to circumvent the official
legal system all together. When making contracts they resort to self enforcing contracts, to
self help and, if available, to private alternative dispute settlement. In his thesis, Jiang
presents an empirical study of court delays in China. He collected around 600 court files
from various courts and sources in China on the district level, the provincial level and the
high court level. It is an encouraging sign that Jiang could collect this data for scientific
purposes and for the purpose of completing his dissertation thesis. Not long ago this would
probably have been very difficult, if not impossible.

The most interesting finding in his thesis is that court delays are not a prime factor for the
problems of the legal system in China. Due to the time bound program of the courts at the
district level, more than ninety percent of the cases in the sample are discharged within half a
year. The Supreme Court decision seldom takes more than five years from the date of the first
VI Foreword

filing. These figures are roughly equivalent to those in Western countries, such as Germany.

Therefore, court delays in China seem not to be the main problem unlike in a large number of

other developing countries. One weakness of the Chinese legal system is the low level of

training received by lower courts judges. Some years ago less than sixty percent of all judges

had a bachelor's degree in law and less than one percent had a master degree. This has lead to

a very high quota of appeals. According to opinion polls, judges have admitted that they are

not independent - even in their own view. They are often subject to interference, especially

from the local political parties and other state organizations. These weaknesses, along with

the problem of corruption, are now widely discussed within China Another weakness of the

legal system, which Jiang describes in his thesis, is sluggish enforcement of court decisions.

Again, it seems that quite often court decisions are not properly enforced because of local

partisan interference.

However, unlike in many Latin American countries, private demand for court services in civil

law has grown rapidly in China. The number of civil cases filed has more than tripled over

the last 13 years, with more than four million cases filed per year. This shows that private

individuals in China have an increasing demand for court services. This is an encouraging

sign for the development of the Chinese market economy.

Jiang's dissertation is a very valuable contribution toward the understanding of the civil law

system in China, particularly of its strengths and weaknesses. It is a scholarly work, which

substantially adds to the discussion about the development of the legal system in China

Moreover, it is a contribution to the overall legal and economic debates on the

interrelationship between the economic system and the rule of law. This book can be readily

recommended to everyone interested in the development of the legal system in China and to

scholars who are interested in the more general consequences of the law in developing

countries.

Prof. Dr. Hans-Bemd Schafer


Preface VII

Preface

This study aims to touch on the concern of court delay and its, both monetary and social,

costs in the Chinese judiciary. As the work of inquiry proceeded, it was revealed to me that

reform of the judicial system in China is a keen task to accommodate the vast social and

economic changes over the past 20 years. Such reform, which China is now undergoing,

demonstrates that lawmakers are aware of the importance of speedy judgment in the courts

and a well-functioning judiciary is an assurance of social justice, and economic efficiency.

This study will be of value to lawyers, judges and others concerned with the problem of court

delay and law enforcement, in assisting in a solution for what is increasingly a practical

problem. The application of statistical method in measurement and quantification of court

delay is very useful to help find the relationship between court delay and the costs incurred in

civil litigation.

As court delay is a worldwide problem facing not only developing countries, this study will

not ignore the experiences of other countries in ways of coping with this practical problem.

Some comparisons are made with the legal systems in the Western countries, especially

referring to the US and Germany, with respect to court delay and costs in litigation.

Throughout this study, I have had tremendous assistance from the many people named below,

without their guidance and help this thesis would not have been possible. My gratitude is

extended to all of them.

I am extremely thankful to Prof. H. B. Schafer of the Law Faculty of the University of

Hamburg (Fachbereich Rechtswissenshaft, Universitat Hamburg) who was my supervisor and

who has extended much assistance in designing the inquiry, recommended materials in this

field, structuring of the thesis and discussions throughout this study. I have benefited a lot

from his distinguished knowledge of law and economics. I also want to thank Prof. Eger, my

second supervisor, for all his guidance and kindness.

I am grateful to Judge Assistant Ah Yang in the District Court of Huli, Xiamen, China, who

collected useful first-hand data from the courts and from whom I have also benefited quite a

lot through discussions on specific issues concerning court delay and its costs, as well as
VIII Preface

enforcement of judgments in China. Judge D.S. Zhang of the Intermediate Court of Xiamen

City has also extended many of his views to the reform of the judicial system in China. I am

also grateful to Mrs. Wang, Yan Bin, from the Judicial Statistics Department of the Supreme

People's Court, who provided me with very useful materials and information for this study.

Furthermore, I have benefited a lot from the discussion with her on the issue of court delay in

China.

Many thanks are extended to lawyer Lin, Jian Xin and his colleagues for providing data

collected from his law firm, which made the sampling of data diversified and more

reasonable and convincible.

Special thanks also are extended to Prof. Qi, Shu Jie of the law school at the University of

Xiamen, China, who specializes in the research of Civil Procedure Law and who gave me

useful advice about data-collection and current judicial reform in China Thanks are also

extended to Prof. Fang, Liu Fang of China Politics and Law University who instructed me to

read some of the latest publications in the field. I am also thankful to Prof. R. Cooter,

Berkeley Law School, University of California (US), who gave me useful advice during his

workshop on Law and Economics of Development at the University of Hamburg.

Great thanks also extend to Susan Schneider (Ohio/the US), who spent her precious time to

check the language and provide some useful comments.

Many judges, lawyers and friends spent their time to discuss and argue with me and help me

on various points. I regret that I cannot thank each of them individually.

Qing-Yun Jiang
Contents IX

Contents

FOREWORD V

PREFACE VH

CONTENTS IX

LIST OF CHARTS AND GRAPHS XIH

LISTOFTABLES XV

INTRODUCTION 1

CHAPTER 1 SPECIAL PROBLEMS OF THE JUDICIAL SYSTEM IN DEVELOPING COUNTRIES.. 7

I. INTRODUCTION 7

II. THE JUDICIAL SYSTEM IN DEVELOPING COUNTRIES 9


III. THE PROBLEMS FACING THE JUDICIAL SYSTEM IN DEVELOPING COUNTRIES 10
1. Court Delay 11
2. Difficulty in Judicial Independence 13
3. Non-adapted Civil Law 15
4. Absence of Arbitrariness in Judgments 16
5. Corruption 17
6. Law's Enforcement 19
IV. THE IMPETUS OF JUDICIAL REFORM 21
1. Access to Justice: Internal Impetus 21
2. Well-Functioning Legal System for Market Economy: External Force 23

CHAPTER 2 LEGAL SYSTEM AND CIVIL PROCESS IN CHINA 24

I. INTRODUCTION 24
II. THE DEVELOPMENT OF CHINESE LEGAL SYSTEM IN BRIEF 27
1. From 2100 BC until 1911 historical Review 28
2. Legal Transplantation (1911-1949) 31
3. The Current Legal System in P. R.China (from 1949) 32
III. CIVIL PROCEDURE CODE (1991) AND CIVIL PROCESS 33
1. Objectives and Functions 34
2. Structure of Civil Procedure Code 34
3. Court System 36
4. Litigation Cost 38
5. Duration of the Civil Process 41
IV. THE CURRENT STRUCTURE OF THE COURT SYSTEM 44
1. Two-tier Jurisdiction 44
2. Division of Work 46
3. The Trial and Appeal Procedure 50
4. Retrial Procedure under Judicial Supervision 51
5. The Functioning of 2-tier Jurisdiction versus 3-tier Jurisdiction 54
X Contents

V. THE PROBLEMS FACING THE CHINESE JUDICIAL SYSTEM AND ITS RESTRUCTURING 55
1. Judicial Independence: A Dilemma 56
2. Lack of Human Capital 59
3. Administrative Pattern in Judiciary 62
4. Dim View of Procedural Justice 64
5. Severe Problem of Corruption 64
6. The Problem of Delay in Court 65

CHAPTER 3 A SURVEY OF THE FUNCTIONING OF COURT SYSTEM: DURATION


OFTHE COURTS 67

PART I : SURVEY OF THE DURATION OF THE COURT 67

I. INTRODUCTION 67

II. FILING AND DISPOSAL: A NATIONWIDE OVERVIEW AND ANALYSIS 69


1. Continuous Increase in Filing and Disposition 69
2. Quick Increase in Appellate Cases 76
3. Improved Efficiency in the Past 10 Years (1989 - 1999) 78
4. Imbalance in Filing and Disposition 78
5. The Problems Caused by the Imbalanced Progress in Disposition 82
6. Reasons of the Imbalance in Disposition 83
7. Findings 84
8. Suggestions 85
III. EMPIRICAL STUDY OF FUNCTIONING OF THE COURTS 86
1. Sources of Data 88
2. Sample Survey 90
a) District Court of Huli, Xiamen 90
b) Intermediate Court of Xiamen City 98
c) The High People's Court 108
d)The Supreme People's Court Ill
IV. FUNCTIONING OF COURT SYSTEM: ASSESSMENT BASED ON INTERVIEWS AND QUESTIONNAIRES 118
1. Views of the Parties: Delay, Cost, and the Factors for Court Success 118
2. Views of the Judges (Interviews) 120
3. Views of Lawyers 123
4. Assessment based on the Questionnaire - The Major Factors Affecting Court Delay and the Effect of
Regulation on Time Limit 124
V. FINDINGS BASED ON THE EMPIRICAL STUDY 133
1. Sample Study in the District Court and the Intermediate Court 133
2. Sample Study in the High Court and the Supreme People's Court 134
3. Court Delay in respect of Retrial Cases 134
4. The Interviews 135
5. Some Conclusions 136
PART II: CRITICAL EVALUATION OF FUNCTIONING OF THE COURT SYSTEM
-RESTRUCTURINGTHE COURT SYSTEM 138

I. INTRODUCTION 138
II. CRITICAL ASSESSMENT OF COURT EFFICIENCY 138
Contents XI

1. Critics on Settlement Ratio and Duration of the Courts 139


2. Enhancement of Efficiency by Improving Human Capital 141
III. COURT DELAY AND THE TRIAL COMMITTEE 142
1. The Trial Committee - 'Super Collegial Panel' and its Problems 142
2. Pros and Cons of the Trial Committee 143
3. Comment 144
IV. THE APPLICATION OF SIMPLE PROCEDURE 145
1. Problems Concerning Simple Procedure 146
2. The Prospect of Small Claims Tribunal in China 147
V. RESTRUCTURING SUPERVISION PROCEDURE: REDUCING COURT DELAY 149
1. The Aim of Retrial Procedure 149
2. The Major Problems in the Retrial Procedure 149
3. Restructuring the Retrial Procedure 152
VI. EVALUATION OF THE APPEAL 154
VII. ACCESSIBILITY OF THE COURT 157
1. Litigation Cost 157
2. Legal Aid 158
VIII. THE ROLE OF MEDIATION AND ARBITRATION 159
1. Mediation 159
2. Arbitration 161
IX. LAWYERS'ENGAGEMENT AND COURT DELAY 162
X. PROCEDURE JUSTICE AND JUDICIAL REFORM 163
XI. SUMMARY 166

CHAPTER 4 A SURVEY OF LITIGATION COSTS, COURT BUDGETS


AND ACCESS TO JUSTICE 169

I. INTRODUCTION 169
II. AN INVESTIGATION OF LITIGATION COSTS IN CHINA 171
1. The Burden of Judicial Costs and Litigation Costs 171
2. Litigation Costs 173
III. CRITICAL ASSESSMENT OF THE CURRENT COST SCHEME IN CIVIL PROCESS
AND ACCESSIBILITY OF JUSTICE 178
1. The Problem in Prepayment and Reimbursement of Court Fee and Litigation Risk 178
2. High Cost of Non-Litigation Cases 181
3. The Cost of Realizing the Right of Mortgage 182
4. High Transaction Cost in Bankruptcy Procedure 183
5. Fees in respect to Application for Security of Title and Law Enforcement 184
6. Lawyers Fee 184
IV. A SURVEY OF JUDICIARY BUDGET IN JIANGXI PROVINCE 188
1. An Anatomy of Income: Budget, Non-budget Income and Expenditures 189
2. The Effect of Low Budget 191
3. The Allocation Problem of Fiscal Budget and Non-budget Income 192
4. Low Budget and Accessibility of Justice 194
V. FINDINGS AND SUGGESTIONS 194

CHAPTER 5 THE PROBLEM OF ENFORCEMENT OF JUDGMENTS BY THE COURTS 196


XII Contents
I. INTRODUCTION 196
II. THE ORGANIZATION OF ENFORCEMENT AND PROCEDURE 197
1. Enforcement Procedure 197
2. Enforcement Basis 199
3. Measures of Enforcement 199
4. Major Enactments and Judicial Interpretation with regard to Law Enforcement 199
III. THE PROBLEMS AND REASONS FOR THE'DIFFICULTY IN LAW ENFORCEMENT' 200
1. The Problems 200
2. The Reasons behind the Difficulties in Law Enforcement 203
IV. A SURVEY OF DURATION OF THE ENFORCEMENT OF JUDGMENT 209
1. Sample Study 209
2. Average Duration of the Enforcement of Judgment 209
3. Comparison: Economic Development and Duration 211
V. CRITICAL EVALUATION OF CURRENT LAW ENFORCEMENT MECHANISM 213
1. The Effectiveness of Enforcement Law 213
2. The Social and Economic Environment for Enforcement 214
3. Short-term Deterring Effect of the Measures by the Central Government 216
4. Assessment of 5 Year Reform Outline of the People's Court (Reform Outline) 218
5. The Coordination between Judgment and Enforcement 219
6. Enforcement of Arbitration Awards 221
VI. FINDINGS AND SUGGESTIONS 222
1. Findings 222
2. Suggestions 223

CHAPTER 6 SUMMARY AND POLICY RECOMMENDATIONS 227

BIBLIOGRAPHY 244

APPENDICES 251

APPENDIX-I (QUESTIONNAIRE TO THE PARTIES) 251


APPENDIX-II (QUESTIONNAIRE TO THE COURTS) 253
APPENDIX III (JUDICIAL STATISTICS FROM 1988 TO 2000) 255
List of Charts and Graphs XIII

List of Charts and Graphs

Charts

Chart 2. 1 Civil Court System in China 45

Chart 5. 1 The Pattern of Law Enforcement when the Parties are in different Territory of Jurisdiction 220

Graphs

Graph 3. 1 Total Cases filed in the Courts in China (1990-1999) 70


Graph 3. 2 Total Cases disposed by the Courts in China (1990 - 1999) 71
Graph 3. 3 Civil / Economic Cases disposed by the Courts in China from 1 9 9 0 - 1 9 9 9 72
Graph 3. 4 The Percentage of Increase of Civil/Economic Cases and Criminal Cases from 1990 to 1995.. 74
Graph 3. 5 Percentage of Increase of Civil Appeal Cases and Trial Cases in 1997,1998 and 1999 76
Graph 3. 6 Percentage of Increase of Administrative Appeal Cases and Trial Cases
in 1997,1998 and 1999 77
Graph 3. 7 Number of Filing Cases and Settlement in each Month from 1989 to 1998 79
Graph 3. 8 Cases Settled from 08.97 to 05.98 80
Graph 3. 9 Average Cases Settled by each Judge in Jan., Aug., and December respectively (1998) 81
Graph 3. 10 Proportion of Settlement in each Season of 1998 82
Graph 3.11 Cases disposed by the District Court of Huli, Xiamen and the corresponding Time 93
Graph 3. 12 Average Time Consumption in each Phase of Disposition 94
Graph 3. 13 Cases disposed by the Intermediate Court, Xiamen and the corresponding Time 100
Graph 3. 14 Average Time Consumption in each Phase of Disposition 102

Graph 5. 1 Average Time Consumption in each Phase of Execution 210


List of Tables XV

List of Tables

Table 2. 1 Activities of the Courts under Civil Procedure Code 35


Table 2. 2 Jurisdiction of the Courts and the Number of Courts 46
Table 2. 3 "Dispute Value" of the Trial Cases with respect to Property Disputes filed in High
People's Court 48
Table 2. 4 "Dispute Value" of the Trial Cases with respect to Economic Disputes filed in High
People Court 48
Table 2. 5 "Dispute Value" of Trial Cases filed in the Intermediate People's Court in Xiamen City 49
Table 2. 6 "Dispute Value" of Trial Cases filed in the District People's Court in Xiamen City 49
Table 2. 7. Number of Judges in different Time and the Average Dispositions 61

Table 3. 1 Total Cases filed in the Courts in China (1990-1999) 70


Table 3. 2 Total Cases disposed by the Courts in China (1990 - 1999) 71
Table 3. 3 Civil cases / Economic Cases disposed by the Courts in China (1990 - 1999) 72
Table 3. 4 Average Number of Cases Settled Annually by each Judge in 1989 and 1998 78
Table 3. 5 The Duration of Cases by the District Court of H U L I ( N = 287) 91
Table 3. 6 Average Time Consumption in each Phase and Average Duration of the Cases in
District Court, Huli, Xiamen 94
Table 3. 7 The Duration of Cases by Intermediate People's Court of Xiamen ( N = 213) 99
Table 3. 8 Average Time Consumption in each Phase and Average Duration of the Cases
disposed by the Intermediate Court of Xiamen (as court of first instance. Sample: N = 213) 101
Table 3. 9 The Total Duration of Appeal Cases made by Intermediate People's Court of
Xiamen(N = 63) 103
Table 3. 10 Average Time Consumption in each Phase and Average Duration of the Cases
disposed by the Intermediate Court of Xiamen (as appellate court) 104
Table 3.11 Category-wise filed and disposed/dismissed Cases and the Duration in the
High People's Courts 109
Table 3.12 Category-wise filed and disposed/dismissed Cases and the Duration in the
Supreme People's Courts 114
Table 3.13 Time Consumption of Retrial Cases filed in the Supreme People's Court
(12 cases from 107 appeal cases filed in the Supreme People's Court) 116
Table 3. 14 Causes of Court Delay (based on multiple choice) 125
Table 3. 15 Rate of maintained Judgments in Judicial Supervision Procedure (Retrial) 152
Table 3. 16 The Judgments made on the Appeal Cases in 1995 155
Table 3. 17 Rate of the maintained Judgments in the Appellate Courts 156

Table 4. 1 Budget of Litigation Cost 174


Table 4. 2 Court Fees paid by KT in the first Instance against its 13 Debtors from 1997 to 1998 176
Table 4. 3 Lawyers' Fees regulated in Fujian, Shanghai, Shengzhen, Shangdong 187
Table 4. 4 The Operating Cost of the Courts in Jiangxi Province from 1997 to 2000 190
XVI List of Tables
Table 4. 5 The Proportion of Non-budget and Budget Income of the Courts in Jiangxi Province 190

Table 5. 1 Main Regulations on Law Enforcement 200


Table 5. 2 Average Time Consumption in each Phase and Average Duration of Cases.
Sample: 45 Civil Case Filings for Enforcement of Judgments 210
Table 5. 3 Comparison of Enforcement of Court Orders in Different Regions 211
Table 5. 4 Comparison of Law Enforcement in Different District Courts under Jurisdiction
ofChongQingCity 212
Introduction 1

Introduction

Many countries, especially developing countries, have experienced the difficulty of the
functioning of the judiciary systems and have come to the awareness of the importance of
reforming the court system.1 Obviously, delays, backlogs and uncertainty associated with
unexpected court outcomes have diminished the quality of justice.2 The Chinese courts
system, as well known publicly, faces the same problems as many other developing counties.
Court congestion and delay, corruption in the judiciary, and miscarriage of justice, have been
heavily criticized by the public, as well as the difficulties in law enforcement.3
In this context, this thesis will focus on the problem of court delay and its costs in China with
an empirical study and a comparative, as well as an economic, perspective. The thesis will
first address the problem of court delay and judiciaries in developing countries and in China.
Afterwards, it will apply quantification to survey the current duration and costs of the courts
in China, as well the enforcement of judgment. Furthermore, the thesis is an effort to aid in
resolution of the problems by providing a detailed study of court delay, costs and law
enforcement.

Court Delay in Developing Countries


An efficient judicial system shall provide speedy redressal and less expensive court services
to the parties involved. In an efficient judicial system, basic elements include: relatively
predictable outcomes within the courts; accessibility to the courts by the population
regardless of income level; reasonable time to disposition; adequate court-provided remedies.
Court delay and congestion diminish the quality of justice and bring to the entire court system
a loss of public confidence, respect and lack of pride in the judiciary. This problem is much
more serious in developing countries, as courts in developing countries usually lack human
capital and face difficulties in judicial independence, budget autonomy and judicial
1
Adrian A.S. Zuckerman (ed), Civil Justice in Crisis, Oxford University Press, 1999, p. 12.
2
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. II, de Geest and B.
Boukkaert (eds.), 1999, pp. 582-583; Also see homepage (http://encyclo.findlaw.com/).
3
In a poll made by China Commercial Press just before the assembly of the People's Congress in Dec. 2002, 91% of the
interviewed replied that they were not confident in the judiciary and were pessimistic about 'access to justice'.
2 Introduction

administration etc.; meanwhile, the problem of corruption and incompatibility of laws affect
and diminish the functioning capability of the courts. All these factors lead to a dysfunctional
court system and cause civil crisis.4 For example, in Latin America, some judicial systems
failed to provide remedies to the parties in the 1980's when filings in the courts continued to
decline under the absence of legally enforced alternative dispute resolution mechanisms, like
arbitration or mediation.5

Court Delay and Litigation Costs in China: an Empirical Study


In order to have a critical evaluation of the functioning of the court system with respect to
court delay, decisions on cases and enforcement of court orders/decisions, primary data with
categorized filings were collected from the District Court, Huli and Intermediate People's
Court in Xiamen City.
The secondary data in respect to filings and dispositions by the High People's Court and the
Supreme People's Court is collected from the publications of the Supreme People's Courts,
mainly from case books and China Law Year Books. The study of filings and dispositions in
these higher courts will cover all of the 4 judicial hierarchies in the court system.
The opinions of court users, judges, and lawyers were collected through interviews and
questionnaires to assist in further analysis and evaluation of the functioning of the court
system The addressing of ADR is to evaluate whether or not the current legal system can be
reformed to reduce the caseload of the courts and achieve a higher efficiency within the court
system
The analysis of litigation costs, which has a strong impact on 'access to justice', will be based
on the current laws and regulations. Furthermore, the analysis of the operational cost of the
courts is based on data available from the High People's Court of Jiang Xi Province.

The Problem of Law Enforcement in China


Another important aspect of this study is the investigation of enforcement of judgments in
China. As law enforcement currently is at a bottleneck in the judiciary in China, this study
4
Ditto. Specifically, a judicial crisis begins at the point when backlogs, delay and payoffs increase the cost (implicit or
explicit) of accessing the system.
5
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. II, de Geest and B.
Boukkaert (eds.X 1999, p. 584; Also see homepage (http://encyclo.findlaw.com/).
Introduction 3

will therefore extend special investigation into law enforcement and trys to find out the
reasons behind it. Due to the lack of systematic records of statistics in this regard the study of
law enforcement is based on fragmentary sources of information and on my own collection of
data from different Chinese courts at various court levels.

The Main Goal of the Study


In the past 20 years, court delays, backlogs and miscarriage of justice has admittedly been
seen as serious problems facing the judiciary in the 1990's as society showed its' frustration
with the judiciary. Reform in recent years has been a response to the people's demand for an
efficient judicial system which can provide justice and due remedy. Therefore, this thesis
attempts to answer the question: What is the problem of court delay in the Chinese judiciary
today? There are different opinions in China: according to a research report of the High
People's Court of Chongqing City,6 the problem of court delay in China could be divided into
3 phases: i) Before 1999, due to the dim view of law among the judges and many procedural
defects, there were many cases delayed in the courts and the public was very dissatisfied and
frustrated with court services; ii) from 1999 to April 2002, due to the effects of the Five
Year Reform Outline of the Supreme People's Court and the Regulation on Strict
Implementation of Time Limit (2000), court delay was reduced sharply; iii) after April 2002,
due to the procedural reform and regulations on time limit for evidence-collection, the
problem of court delay is not seen as 'serious' anymore.7 Furthermore, the statistics collected
by the Supreme People's Court indicates that most of the dispositions were within the time
limit. Less than 10 % of the dispositions have over run the time limit;8 whereas many reports
and literature still regard court delays and backlogs as a serious problem in the judiciary,
though no empirical study has been conducted. Thus, this empirical study is to answer the
question of the current status of the problem of court delay facing the judiciary in China.
Another main task of the study in this thesis is to address the problem in enforcement of
judgments in China, as the difficulties in law enforcement have become the main obstacle of

6
Unpublished internal investigation report provided by the Supreme People's Court.
7
See the internal report conducted by the research team of the High People's Court of Chong Qing City in 2002, p.2. The
investigation was assigned by the Supreme People's Court to analyze the problem of court delay.
8
See Huang, Shuang You, judge of the Supreme People's Court, Efficiency Analysis of Judicial Work, in: People's Judiciary
(11)2001, p. 21.
4 Introduction

legal construction and functioning of the legal system9 Law enforcement has become an
imminent task for the judiciary nowadays. For example, in the first half of 1998, only 39.5%
of the court orders were enforced,10 as 'a right without remedy is not a right', failure in
enforcement not only deprives the rights of the parties, but also hampers the efficient
functioning of a market economy. The reasons come not only from the internal organization
of the courts, which are responsible both adjudication and law enforcement," but also from
the external social and economic environment, the attitude of the general public towards the
rule of law, the economic system, especially the corporate system, and the development of the
economy. Therefore, the existing difficulties in law enforcement not only concerns the reform
of court organization, but also reform in politics, administration and the economic systems,
such as banking and taxation, corporate, etc., and further deterrence to administrative
interference, localism and corruption.

Judicial Reform and Suggestions


The procedural reform being undertaken in the courts12 may be a reflection of part of judicial
reform aimed at enhancing efficiency and pursuing justice. The internal impetus of the
judicial reform not only originates from court delay, backlogs, high litigation costs, and
difficulties in enforcement of judgments, but also originates from the difficulties and
problems arising from the old and backward judicial system and its dysfunctions. For
example, the spread of localism (regionalism) in the judiciary affects uniform rule of law and
the authority of the state, low productivity of the courts due to the current backward judicial
administration, low quality of judges in general and non-adaptation to the professionization
requirement of the judiciary, the problem of corruption and inequality in judgment lead to
distrust by the public and has damaged judicial authority. Further, the administrative pattern13
9
See Wan, Fei Hong, judge of the Supreme People's Court, Report about the action to clear up backlogs in law enforcement,
People's Judiciary (9) 1998, p. 4.
10
The figure is even lower as mentioned by some lawyers in interviews. Many said that less than 20% of the court
orders/decisions were duly enforced in their cases.
11
Art. 207, Section 3 (Enforcement Procedure), Civil Procedure Code.
13
The judicial reform in China starts from the reform of the pattern of trial with respect to evidence, inquiry, judgment and
the responsibility of judges and collegial panel. The trial reform was first put forward in the 14* meeting of the courts in
China in 1989. As a result, Civil Procedure Code (1979) was amended in 1991, the amendments reflected the experiences
especially in the burden of collecting evidence, public hearing and voluntary mediation etc..
13
It refers to the absence of arbitrariness of judges in making his own judgment in individual case, as the opinions have to
be reported to each higher hierarchical level, from presiding judges to the president of the court, for final decision. Under
such pattern of trial, the duration is longer and uncertainty of judgment is more likely, as the officers of higher hierarchy do
not involve in the original trial and enjoy the discretion of decision.
Introduction 5

in disposition of cases seriously affects the functional capability of the courts; backward
facilities and low salary especially in lower courts hamper the capability of the courts.
External force from the transition to market economy and the demand for rule of law as stated
in the constitution requires the legal system to adapt to social and economic change.
If the judiciary is to provide equality and efficiency, it cannot simply deal with the symptoms
of court delay, backlogs, failure in enforcement of court orders or decrees, corruption, etc.;
it must also touch on 'the root political, economical and legal causes of an inefficient and
inequitable judiciary'. 'Basic elements of judicial reform must include improvements in the
administration of the courts and case management practices; the redefinition and/or expansion
of legal education programs and training for students, lawyers and judges; the enhancement
of public access to justice through legal aid programs and legal education aimed at fomenting
public awareness of their rights and obligations in the courts, the availability of ADR
mechanisms, such as arbitration, mediation and conciliation: the existence of judicial
independence (that is, budget autonomy, transparency of the appointment process and job
security) coupled with a transparent disciplinary system for court officers; and the adoption of
procedural reform'.14 As reform of the judicial system cannot be completed in a short time,
each component forms an integral part of the reform. Such reform concerns the readjustment
of judicial thinking, repositioning of judicial function, judicial administration and the
modernization of the judicial system in China15

Structure of the Thesis


This thesis is structured as follows: Chapter 1 addresses the legal system in developing
countries and the importance of a well-functioning judicial system to foster social and
economic development. Specifically, the shortcomings of the legal system in developing
countries will be discussed. Furthermore, this chapter serves as an introduction to the central
issue in this paper: the problem of court delay and its costs to the judicial system in China
Chapter 2 will first present an introduction to the judicial system in China, and further discuss
the civil process and the problems facing the judiciary in China. Chapter 3 is the core of the

14
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. IL de Geest and B.
Boukkaert (eds.X 1999, p. 586; Also see homepage (http://encyclo.findlaw.com/).
15
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 11.
6 Introduction

thesis in which empirical study is conducted. This chapter first applies the data available from

1989 to 2000 in all of the courts to make an analysis of the nationwide courts' productivity

and efficiency. An empirical study is presented based on random samples from the District

Courts, Intermediate People's Court in Xiamen City and the High Courts, as well as the

Supreme People's Court, serves as an investigation of the duration of disposition of cases in

each hierarchical level of courts. Furthermore, critical evaluation and assessment of the

functioning of the court system will be made. Chapter 4 demonstrates the problems of

litigation costs and accessibility of justice stressing the importance of budget autonomy for

the courts. In connection with the study, a data-based analysis will be made to discuss how

important it is that the state should subsidize the judicial system so as to promote economic

development. In Chapter 5, a thorough analysis of the difficulties of law enforcement will be

made, since enforcement ofjudgment has been the toughest task facing the judiciary for quite

a long time. This chapter will also discuss the current social and economic environment of

law enforcement, and its reasons as well as the measures, which should be taken to enhance

law enforcement. Chapter 6 summarizes the findings and provides policy recommendations

and stresses the importance of the reform program aimed at a well-functioning judicial

system

The study has some obvious limitations. The content would be enriched if it had more

samples and data from courts in other regions and provinces. The reason for such limitations

is due to the difficulties in obtaining first-hand information from the courts, which are

reluctant to disclose inside information under the current internal administration, and the high

cost of collecting the information from courts in other provinces due to the limitations of

contacts and travel. However, this empirical study is an endeavor to conduct an investigation

on the duration of civil procedure and litigation costs, as well as law enforcement in China

based on statistical data and samples from the courts.


Chapter 1 Judicial System in Developing Countries and its Problems 7

Chapter 1

Special Problems of the Judicial System in Developing Countries

The legal framework in a country is as vital for economic development as for political and social

development. Creating wealth through the cumulative commitment of human, technological and capital

resources depends greatly on a set of rules securing property rights, governing civil and commercial

behavior, and limiting the power of the state... The legal framework also affects the lives of the poor and,

as such, has become an important dimension of strategies for poverty alleviation. In the struggle against

discrimination, in the protection of the socially weak and in the distribution of opportunities in society, the

law can make an important contribution to a just and equitable society and thus to prospects for social

development and poverty alleviation. (World Bank, 1994)1

I. Introduction

A well functioning judiciary is a central element of civil society.17 The judicial system, as
indicated by the World Bank, is considered to be among the top ten significant constraints to
private sector development.18 The quality and availability of court services will affect private
investment decisions and economic behavior at large, from domestic partnerships to foreign
investment. However, basic elements that constitute an efficient judicial system are missing
in developing countries.19 These elements are: relatively predictable outcomes within the
courts; accessibility of the courts by the population regardless of income level; reasonable
time to disposition; and adequate court-provided remedies. In developing countries generally,
the judicial systems do not come close to the goals of the judiciary, which should be capable
of applying and enforcing laws equitably and efficiently, and laws often are not subject to
predictable interpretation. The lack of access to a predictably impartial and efficient judicial

16
World Bank, Governance: The World Bank's Experience (Washington DC: The World Bank, 1994).
17
Sir Jacob, The Reform of Civil Procedural Law, in: The Reform of Civil Procedural Law and Other Essays in Civil
Procedure, London, 1982, p. 1.
18
World Bank, Ecuador: Constraints to Private Sector Development, Washington, DC, The World Bank, Trade, Finance and
Private Sector Development Division, LAC Country Department IV, 1993.
19
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. IL de Geest and B.
Boukkaert (eds.), 1999, p. 582; Also see homepage (http://encyclo.findlaw.com/).
8 Chapter 1 Judicial System in Developing Countries and its Problem

system creates uncertainties that hamper completion of new transactions, particularly those

involving previously unfamiliar parties and small or start-up businesses. This uncertainty,

which is closely related to rapidly increasing backlogs, delays, and corruption, has generated

a broad distrust of the system by the private sector and the general public and even increasing

concern within the system itself.20

The legal systems in developing countries are mostly established through legal

transplantation by adopting Western civil law. Most African countries, countries in Latin

America, and East Asia (China, Japan, and South Korea) transplanted Western civil code into

its legal system. The adoption of a civil code, as proposed, would "assure as quickly as

possible a minimal security of social relations".21 Although the codification of civil law has

helped many developing countries establish their legal systems in shorter time, in practice the

rights of the general public are frequently ignored and violated due to the traditionally dim

view of law and the dysfunctional judicial system. Even the best legislation is meaningless

without an effective and efficient judicial system to enforce the law. Without the judicial

system, the law is only written on paper and its goals cannot be realized. Another concern is

the compatibility of the laws enacted by the parliaments in developing counties to the social

norms followed by the people and businesses in their daily life.22 The cost of complying and

enforcement will be high if the law lacks compatibility to the social norms and customs.

Developing countries are fully aware of the importance of a well functioning judicial system

in establishing a market economy and to its economic development. A well functioning

judicial system with easy access to the courts and swift law enforcement would lead to

"comparatively low costs in using the market",23 whereas in an economy with a weak

judicial system, the costs of using the market would be comparatively high, and even the

growth of GDP would be restrained to 2.6 percent.24 "Judicial reform is on the modernization

20
Buscaglia, Edgardo Jr., Dakolias, Maria and Ratliflf, Willam, Judicial Reform in Latin America: A Framework for National
Development, Stanford University 1995, p. 2.
21
Rene, David, A Civil Code for Ethiopia: Consideration on the Codification of the Civil Law in African Countries, Tulane
Law Review, Vol. 37, 1963, p. 189.
22
. Buscaglia, Edgardo Jr, Law & Economics of Development, 1999, in: Encyclopedia of Law & Economics, p. 566. Also see
homepage (http://encyclo.findlaw.com).
23
Schaefer, H.-B., The Significance of a Well-functioning Civil Law in the Process of Development, Paper presented at the
Conference of the Latin Americans Law and Economics Association in Quito (Ecuador) June 15* to June 17* 1998,
Manuscript, 1998, p. 4.
24
Sherwood, Robert M, Shepherd, Geoffrey and De Souza, Celso Marcos, "Judicial Reform and Economic Performance",
Chapter 1 Judicial System in Developing Countries and its Problems 9_

agenda of many countries. Demands for reform, however, are not founded on an
acknowledgement that a more effective judicial process is needed to facilitate economic
performance. The rationale for reform needs to be strengthened in order to sustain reform
efforts in the face of strongly entrenched interests which will oppose all but superficial
reform".25 The economic reforms give rise to the modernization of legal systems in many
developing countries. In Latin America, China and South-East Asia, judicial reform is one of
the top national agendas for fostering economic growth. The need for a well functioning
judiciary becomes increasingly evident. Democratization, urbanization and the adoption of
market reforms have all created additional demands for court services.26 The current
undergoing legal reform in China reflects this tendency and shows that judicial reform in this
country is aiming to safeguard the economic reform, to facilitate trade and transaction, and
define property rights.

II. The Judicial System in Developing Countries

Most developing countries and countries in transition adopted Western civil law into its legal
system. The Civil Code was transplanted into the French colonies and the Common Law was
taken over by the English colonies. The German Civil Code, (Buergliches Gesetzbuch - BGB)
or at least parts of it, have been exported to Japan, Korea, Taiwan, China and countries in
South America.27 Today, the formal socialist countries in Eastern Europe and China have
slowly shifted from a socialist legal system28 characterized by the production of centralized
regulations to pre-revolutionary private civil law. The second phase of transplantation of
Western laws into the reforming countries of Eastern Europe and Asia (especially China) is
still ongoing, especially in the field of trade-related law, such as commercial law, bankruptcy

in: The Quarterly Review of Economics and Finance, Vol. 34, 1994, p. 101.
25
Ibid.
26
Buscaglia, Edgardo Jr. and Domingo, Pilar, "Political and Economic Impediments to Judicial Reform in Latin America",
in: Buscaglia, Edgardo, Ratliff, Willam and Cooter, Robert (eds), Law and Economics of Development, JAI Press, 1996.
27
See Schaefer, H.-B., The Significance of a Well-Functioning Civil Law in the Process of Development, Paper presented at
the Conference of the Latin Americans Law and Economics Association in Quito (Ecuador( June 15* to June 17* 1998,
Manuscript, 1998, p. 16.
28
There are four legal traditions in the 20* century, namely civil law, common law, administrative law and socialist law.
Civil Law or Code Law is mainly rooted in the Continental Europe and some of the colonial countries in Africa, in Latin
America and in some Asian Countries; Common Law or judge-made law based on stare decisis is applied in the US, UK and
the Common Wealth Countries; Administrative law is regarded as the framework to establish the rules to be followed in the
relationship between the state and private individuals, and it has been the byproduct of the expansion of the government role
in Western countries; Socialist Law was applied in the Eastern Bloc.
10 Chapter 1 Judicial System in Developing Countries and its Problem

law, contract law, property law etc. Through legal integration and by adapting the law and its
enforcement mechanisms to a modern economy, developing countries try to build up a sound
judicial system and foster economic growth.
However, access to justice is the central issue in the judicial systems nowadays in developing
countries. When individuals, or in some cases groups of people, are aware of their legal rights,
the judicial system shall enable them to obtain legal services to invoke these rights. The rights
of the people can only be effectively protected when the court system is functioning
effectively to secure access to justice and provide court remedies without delay. But in most
developing countries, the judiciary still faces many problems ranging from lack of public
confidence and accessibility of justice due to court congestion and long delays in the courts,
as well as the perception and reality of severe problems with corruption. In this context,
judicial reform shall not only deal with symptoms, but also a profound reform in judiciaries.

III. The Problems facing the Judicial System in Developing Countries

Any reform shall first identify the existing problems. In the judiciary, lack of confidence of
the general public injudicial system and difficulty in "access to justice' are the main problems
of the judiciaries in developing countries. According to the study done by Buscaglia, "the
majority of people in Latin America lack confidence in the judicial system for many reasons.
Surveys conducted in Argentina, Brazil, Ecuador, and Peru show that between 55 percent and
75 percent of the public manifests a very low opinion of the judicial sector. More specifically,
in Argentina 46 percent of the people surveyed perceived the judicial sector as inaccessible.
The same attitudes prevail in Brazil, Ecuador, and Venezuela, where the percentages are 56
percent, 47 percent, and 67 percent, respectively". Furthermore, "In Brazil, some 76.9%
percent of the judges interviewed think there is some sort of crisis in the judiciary. This crisis
is due to the fact that the efficiency of the courts has declined markedly, driving litigants to
make every effort to avoid using the courts at all".29
The reasons for a lack of confidence by the general public in access to justice are attributed to
the lengthy disposition of cases, inequality of judgment, high cost of litigation and corruption

29
Buscaglia, Edgardo Jr., Dakolias, Maria and Ratlift Willam, Judicial Reform in Latin America: A Framework for National
Development, Stanford University 1995, p. 5.
Chapter 1 Judicial System in Developing Countries and its Problems 11

etc., and this added cost is perceived as an increase in the price of using court services and

consequently impedes the accessibility of justice.

I. Court Delay

The consequence of court delay has a negative effect on the society. Frequently, court delay

causes deterioration of evidence due to the lapse of time and makes it less likely that justice

will be done when the judgment is finally made; court delay affects social trust in the

credibility of the judiciary, and in the meantime causes society to incur a high cost. As a

consequence, court delay deprives citizens of a basic public service.30 Court delay leads to a

loss of public confidence and respect in the overall court system. Moreover, court congestion

and delay not only causes an overload of work and tiredness of the judges, but also severely

harms the parties involved in the case as well as the society as a whole.

In civil litigation, however, a prompt trial is merely a desirable objective and the litigants

themselves have no means of compelling their case to be handled more quickly. On the one

hand, to keep the quality of the judgment, the judge must look carefully into the cases and

consequently may need more time, which may cause a delay, thus the parties involved may

have 'delayed justice'; on the other hand, if the judges want to speed up the judgment, the

quality of the disposition could be diminished and the parties may only receive "rough

justice". Beside the lower quality of judgment, the trial court will consequently cause more

appeals and burden to the appellate courts. Furthermore, the long duration of litigation may

result in a departure from legal ethics, as lawyers find it necessary to provide financial

support for indigent clients over the long interval between the filing of the lawsuit and the

trial. A delayed calendar creates another new issue for the courts: whether some cases should

be given preference and tried ahead of others. Any reform to improve efficiency may cause

new enactment or regulation, as court congestion is not happening just for a short time, it

cannot be solved overnight. It requires judicial reform and implementation of new regulations

in order to find a solution. Moreover, the administration of the court is not simply the

administration of a business; too frequent use of the summary judgment procedure may create

30
Zeisel, Hans, Kalven, Harry, Jr. and Buchholz, Bernard, Delay in the Court, Little, Brown and Company, 1959, p. xxii,
Introduction.
12 Chapter 1 Judicial System in Developing Countries and its Problem

other problems, such as miscarriage of justice. Consequently, "rough justice", a result from a

speedy judgment, denies the value of the judicial system.

Judiciaries in many developing countries suffer from increasing backlogs, delay and

corruption, and this has generated complete distrust of the system by the private sector and

the public in general. Lack of access to an equitable and efficient judicial system creates

added uncertainty and hampers the realization of beneficial transactions.31

Through a study on the judicial system in Latin American countries by Buscaglia, it indicates

that increasing delays, backlogs and the uncertainty associated with expected court outcomes

have diminished the quality of justice throughout the region. The judiciary is faced with

several obstacles, including a dysfunctional administration of justice, lack of transparency

and a perception of corruption.32

The effectiveness of the law depends, to a large extent, on the rapidity of the proceedings.

Court delay increases costs to the parties involved, in return decreasing the use of the court as

a means for dispute resolution and will result in inaccessibility to the courts. In many

countries in Latin America, the duration of proceedings has increased dramatically between

1983 - 1993,33 which led to a court crisis and the collapse of the judiciaries as the demand

for services of the civil courts decreased under the complete absence of legally enforced

alternative dispute resolution mechanisms (i.e. arbitration or mediation). The results of polls

in Latin America showed that 47 to 67% of the populations consider the civil law court

system as "not accessible".34 In India some cases even took up to 15 years for a court filing

to receive a supreme court decision; according to a World Bank report, in the trial courts in

Brazil and Ecuador proceedings take an average of 1500 days. Conversely, in France the

average proceedings take 100 days.35

Delays encountered in litigation before the courts in South and South-east Asia create a

barrier to economic success. For example, in 1987 the Supreme Court of India noted that

31
Buscaglia, Edgardo J, Law and Economics of Development, 1999, in: Encyclopedia of Law and Economics, p. 581 ff.
(http://encyclo.findlaw.com).
32
Ditto.
33
In Argentinean 47.8%, in Brazil 39.1 %, in Chile 11.1%, in Columbia 27.8% and in Venezuela 48.3%. Compared with
Buscaglia, Edgardo, and Maria Dakolias. Judicial reform in Latin American Courts: The Experience in Argentina and
Ecuador, 1996, World Bank Technical Paper No. 350, World Bank, Washington D.C.
34
Buscaglia, Edgardo Jr., Judicial Reform and Corruption in Latin America, Paper presented at the International Workshop
on Law and Economics, Ghent, February 1996, p. 8.
35
World Development Report 1997, p. 100; also in: Schaefer, H.-B., Die Bedeutung des Zivilrechts fuer den
Entwicklungsprozess, Sonderdruck aus Braunschweigische WissenschaftJiche Gesellschaft 2001, S. 1.
Chapter 1 Judicial System in Developing Countries and its Problems 13_

even if no new cases were subsequently filed, it would take 15 years to dispose of all pending

cases.36 In 1993 it took between 12 and 15 years for a case to be tried before the Bombay

High Court, with an additional period of 10 to 12 years before all appeals were exhausted.

The problem of court delay in China is also considered to be serious, especially before the

year 1999.37 The judicial capacity is not competent enough to deal with the increase in the

filing of cases; delays, backlogs and low quality of judgments damaged the confidence of the

general public toward the judiciary. Some cases took more than 10 years because of the

complicated procedures for filing, trial and appeals, and complaints to the Supreme People's

Court.38 In a poll conducted before the People's Congress was held in Dec. of 2002, 91% of

those interviewed replied that they were not confident in the judiciary and were pessimistic

about the accessibility of justice and that court remedies were difficult to be realized due to

the problem of law enforcement.39

2. Difficulty in Judicial Independence

Judicial independence requires the judges to follow the law only in civil process and that the

courts shall be free from any interference in the course of jurisdiction. Judges shall choose,

interpret and apply the law in a suitable and correct way, and not subject to any outside

influences and/or pressures, which may affect the result of the judgment.40 The courts can

only be a neutral third party and are not inclined to any other party in the judgment, otherwise

the litigation process will be an unfair "two against one" game, and justice is not possible in

such a situation.41 If the judiciary cannot be independent and the law cannot be enforced, the

rule of law will not be materialized. Hence, judicial independence is regarded as one of the

most important principles of the rule of law.42 Judicial independence is commonly accepted

36
P.N. Kumar v. Municipal Corporation of Dehli, 1987,4 SCC 609, 610.
37
See the internal research report conducted by the High People's Court of Chongqing City, 2001, p. 2.
38
In an interview with a big state trading house in Xiamen (Xiamen International Trade Inc.), it was told by the law
consultant of the company that one case concerning contract dispute has consumed already more than 10 years and it hasn't
been finally settled since the company held that the final judgment made by the appellate court could not justify the facts and
that the application of law was in question. The company appealed to the Supreme People's Court and applied for retrial
procedure.
Source from Chinese Commercial Press, in Nov. 2002.
40
Redishs, Martin H., Federal Judicial Independence, 46 Merer Law Review, 1995, p. 707.
41
Shapiro, Martin, Courts: A Comparative and Political Analysis, the University of Chicago Press, 1981, p. 8; also see
Larkings, Christoper M., Judicial Independence and Democratization, in: 44 American Journal of Comparative Law, Fall,
1996, p. 605.
42
It is defined in the Dehli Declaration during the International Legal Scholars Conference in 1959: Judicial Independence
14 Chapter 1 Judicial System in Developing Countries and its Problem

by all countries based on the rule of law, namely, the judiciary shall be separated from

executive, legislature and free from any arbitrary interference and impediment.

In reality, however, it is very difficult for judges and the courts to be independent from the

executive branch of the government, although judicial independence is written into the

Constitution and the relevant laws. "More than 55 percent of judges interviewed in Argentina,

Brazil, Chile, Ecuador, and Venezuela said that lack of independence was one of the main

barriers to justice".43 In an investigation of 288 judges in China, it shows that none of the

judges interviewed regarded the jurisdiction of the courts as completely independent pursuant

to the stipulation in the Constitution, and 43.1% regarded judicial independence in China as

not realized.44

There are several obstacles which must be overcome in order for judicial independence to be

realized in developing countries. Unlike in Western countries, where the judicial system is

established on the basis of separation of power in the legislature, executive and judiciary;

judiciaries in developing countries are not significant institutional counter forces to legislative

and executive abuses of power for several reasons. Despite formal structural independence

which is "guaranteed" by national constitutions, judiciaries face difficulties and are less

active in asserting their powers vis-a-vis the other branches of government. This is due to the

historical roots of the colonial legal systems, which are characterized by the deep

involvement of executive power in the process of interpreting the law.45 In China, the

institutional arrangement gives rise to easy intervention of the executive and legislative

branches since the Constitution allows the ruling party to enjoy power in all branches of the

state. "Intervention by the legislative and executive branches destroys public confidence and

trust in the judicial system and forces judges to be even more dependent on the other

branches of government".46 Moreover, in many developing countries, judges are financially

is a Principle of Rule of Law. In the Black Law Dictionary, "The Rule of Law is regarded as the most important principle of
law, it requires the judges to make judgment only in accordance with the current principle or law, and avoid any arbitrary
interference and impediment". See Black Law Dictionary, p. 1196.
43
Buscaglia, Edgardo Jr., Dakolias, Maria and Ratliff, Willam, Judicial Reform in Latin America: A Framework for National
Development, Stanford University 1995, p. 12.
44
Jiang, Hui Ling, The Condition and Ways to Realize Independent Jurisdiction in China, in: People's Judiciary, (3) 1998, p.
16.
45
In the Colonial territories, king's representatives - the viceroys, held a permanent seat in a superior judicial body (Consejo)
throughout Latin America during the sixteenth and seventeenth centuries. See Alejo Carpentoeros M., Historia Judicial de
Latinamenca (Caracas: editorial Cruz, 1978), pp. 15 , 16, also in: Buscaglia, Edgardo Jr., Dakolias, Maria and Ratliff,
Willam, Judicial Reform in Latin America: A Framework for National Development, Stanford University 1995, p. 12.
46
Buscaglia, Edgardo Jr., Dakolias, Maria and Ratliff, Willam, Judicial Reform in Latin America: A Framework for National
Development, Stanford University 1995, p. 13.
Chapter 1 Judicial System in Developing Countries and its Problems 15

dependent on the local governments who provide salary, pension, and housing etc. Under

such circumstances, the principles of judicial independence are often violated since it is easy

for the administrative authorities to intervene in the decisions made by the judges in specific

cases. Delay always occurs when the local government interferes with these cases. Weak job

security and budget autonomy force the courts and judges to be reluctant to resist the

intervention of the local governments and the administrations, because the local

governmental administrations have strong discretionary power in personnel management and

budget supply. In most developing countries, due to the shortage of state appropriation, local

courts rely heavily on the budget supply from the local governments. It is therefore not

surprising to see that judges can be easily influenced by the executive branch when they fear

for their job security and positions, as well as the necessary budget for the operation of the

courts. Uncertainty related to court outcomes is generally more common in a system where

jurist doctrine is subject to significant levels of partisan interference and pressure groups. The

finality of law is therefore vulnerable when the ruling party and its administrations very often

interfere into the court's decisions.

3. Non-adapted Civil Law

Many developing countries have transplanted parts of Western civil law into their own to

modernize its legal system. The centralization and 'modernization' of the laws through

transplanting was proposed by the first law and development movement during the 1960s and

1970s, such comprehensive, centralized and 'top-down' legislative reform aimed at

modernizing of the public and private dimensions of law was sponsored by Galanter,

Seidman, Trubek.47 The latest development in the economic analysis of efficiency-enhancing

substantive legal reform in developing countries was initiated by Cooter who argues that

efficiency is enhanced by a 'bottom up' process of capturing social norms that are already in

place as 'informally' relevant in human interaction.48 'Good Law' in this respect is formed as

a spontaneous order and as already existing in trade or salesman customs before the legal
47
Galanter, Michael, 'Why haves' Come Out Ahead: Speculation on the Limits of Legal Change, in 9 Law and Society
Review, 95 ff., 1974; Seidman, Robert B., State, Law and Development, New York, St Martin's Press 1978; Tubek, E.,
Towards a Social Theory of Law: 4 An Essay on the Study of Law and Development', 82 Yale Law Journal, 1 ff., 1972.
48
Cooter, Robert, Decentralized Law for a Complex Economy: The Structural Approach to Adjudicating the New Law
Merchant, in: 144 University of Pennsylvania Law Review 1996, pp. 1643-1696.
16 Chapter 1 Judicial System in Developing Countries and its Problem

system defined them as binding laws, following this perspective, the costs of complying and

enforcing the law become higher if the codified laws and regulations are not in conformity

with the social norms followed by people and businesses in daily life, in other words, the

laws or regulations are not compatible with the social norms or business customs. The

dysfunction of the civil law system leads to high cost, for instance, if late delivery were not

sanctioned, firms would produce the products by themselves rather than buying from the

market so to avoid risks, even it is costly to do so. 49 On the contrary, "existence of

enforceable contractual entitlements in Western countries has reduced stocks and often even

replaced them by just-in-time delivery".50 As mentioned by De Soto, under these so called

'bad law' systems, the transaction costs will be high when the law does not comply with the

social norms. It is observable that in many developing countries many newly enacted laws

can not be implemented, as in China, the so called 'policy from the top, game playing in the

bottom' sometimes refers to the difficulty in implementation of those new regulations for

specific purposes since the majority of the people resist following the rules due to the high

cost of compliance.51

4, Absence of Arbitrariness in Judgments

The intervention of the higher courts and governments into the judiciary could deteriorate the

problem of delays and impede fairness of judgments, since judges cannot make their

judgments according to their will based on the law in due process. The absence of

arbitrariness of the law leads to inequality of the judgments, as judges cannot be effectively

protected against partisan and political influences. Very often judges cannot be independent

of the influences of the higher courts, which should only be authorized to revise the decisions

made by the judges in the lower courts during the appeal procedure.52 In China, the

49
Schaefer, H.-B., Enforcement of Contracts, Comment given at the Workshop on Institutional Foundations of a Market
Economy, World Development Report, 23 -25, Feb 2000 Berlin, Manuscript, p. 3
50
Ditto.
31
To make the law attractive to the people, the new law should be designed to induce people to follow so mat it can be
adapted to the national culture. In economic terms, the law can only be adapted and accepted by the general public when the
expected benefits - B (or cost reduction) is larger than the cost incurred in the adaptation (learning cost - CI, investment in
learning) plus the losses - C2 due to the abolishment of the old law (benefits from the old law): f m' _ c' - c" W* dt > o
52
Schaefer, H.-B., The Significance of a Well-Functioning Civil Law in the Process of Development, Paper presented at the
Conference of the Latin Americans Lawn and Economics Association in Quito (Ecuador), June 15* to June 17th 1998,
Manuscript, p. 14.
Chapter 1 Judicial System in Developing Countries and its Problems 17

hierarchical relationship of the higher and lower courts has deviated from a supervisory

function to, to some extent, an administrative relationship. It is a common practice in the

Chinese jurisdiction for the lower courts to ask for instructions from the higher courts with

respect to substantive and procedural questions.53 In the process, the lower courts normally

ask higher courts or the Supreme People's Court to reply on how to deal with some

complicated cases.54 Although the guidance of the higher courts helps the lower courts in

solving some complicated cases especially when the human capital in the lower courts is low

However, such an instruction system is often used to conduct ex-ante communication

between the courts and deprive the right of appeal (since the result of appeal will be most

likely the same when the two-tier courts have already reach a consent on the trial of the case),

or are used by the higher courts to influence the result of the judgments in the name of

instruction..

5. Corruption

In many developing countries, vague legal standards provide an opportunity for the courts to

be used as rent-seeking mechanisms. Judges thus can have discretionary power and broad

latitude to decide cases.55 Administrative deficiencies, like poor computer data processing

allow judges and lawyers to conduct irregularities and corrupt practice. Furthermore, poorly

trained judges in an already overburdened legal system are also susceptible to corrupt

influences and create an environment where the rule of law cannot be guaranteed.56 In most

developing countries, communication is permitted between the judges and the lawyers; such

communication creates an incentive for corrupt behaviors.57 Under a corrupt legal system,

each party tries their best to influence the judges so that he/she can win the case. According to

the game theory, parties will pay the judge when the expected benefit of winning the case will

be larger than not paying. This, however, in the end will increase the litigation cost of both

53
The so-called "Instruction System" in the jurisdiction is not stipulated in relevant law and regulation, but it is accepted
bv the judicial interpretation. See Jing, Han Chao, Reform of the Pattern of Trial, People's Court publication, 1997, p. 63.
5
From the publication of the Supreme People's Court, it is very common to see the reply of the Supreme People's Court on
how to apply the law with regard to specific cases which are filed at the lower courts.
55
Schaefer, H.-B., Die Bedeutung des Zivilrechts fuer den Entwicklungsprozess, Sonderdruck aus Braunschweigische
Wissenschaftliche Gesellschaft, J. Carmer Verlag 2001, Sonderdruck, S. 143.
56
.Buscaglia, Edgardo Jr., Law and Economics of Development, 1999, in: Encyclopedia of Law and Economics, p. 588.
57
Ditto.
18 Chapter 1 Judicial System in Developing Countries and its Problem

parties and lead to a lengthy process.


Further procedural elements contributing to the existence of corruption have to do with the
lack of standards applied to times of disposition. As addressed by Buscaglia, "Lack of explicit
standards coupled with court delay allows court personnel to charge a price for speeding the
procedure".58 Besides procedural defects, organizational arrangement in the court system
also creates corrupt behavior of the judges when they enjoy a large discretion over planning,
management of personnel, resources administration, budget and adjudication of cases.59
In this context, legal reform should narrow or diminish the playroom of the judges so as to
reduce the opportunity to conduct corruptive behavior, and it is better for developing
countries to choose rules rather than standards60. Standards may have lower initial
'specification costs' but they have higher enforcement and compliance costs than rules.61 For
example, if a legal norm regulates that all consumption of toxic substances should be
forbidden; such imprecise standards would give room for the judges to engage in corruptive
conduct since the judges may decide by himselfTherself what a toxic substance is. Although
the generating cost of such legal norm is low, the cost for enforcement and compliance will
be higher since the parties would disagree with the judgment by their own definitions;
whereas a legal norm, which provides a list of toxic substances, will prevent or control the
corrupt behavior of the judges.62

The effects of corruption in the civil law are more difficult to analyze compared to criminal or
public law, since in a civil law process, both the litigants and the defendants can bribe the
judges to win the case,63 it is difficult to decide whether the rules are violated by the judge or

58
Ditto.
59
Ditto.
60
Rules are more precise legal norms, for example, 'a violation of speed limit would be fined for 50 Euro', is a clear
definition of the legal consequence if a person breaches the regulation; whereas standards are more vague and flexible legal
norms, for example, 'a violation of careful driving would be fined for SO Euro', extends discretion to the judges and the
playroom for him to decide what is the due level of care in driving. The generating cost of rules will be higher than that of
standards, since it needs more careful investigation to find out the optimal amount of fine so mat such rules will generate
best legal effects; obviously, rules incur lower enforcement and compliance costs due to its clear definition. Furthermore,
considering the lack of human capital in developing countries, rules would help to reduce the problem of lengthy procedures.
Compare: Schaefer, H.-B., Enforcement of Contracts, Comment given at the Workshop on Institutional Foundations of a
Market Economy, World Development Report, 23 -25, Feb 2000 Berlin, Manuscript, pp. 3,4.
61
Ditto.
62
Schaefer, H.-B., Die Bedeutung des Zivilrechts filer den Entwicklungsprozess, Sonderdruck aus Braunschweigische
Wissenschaftliche Gesellschaft, J. Carmer Verlag 2001, Sonderdruck, S. 144; compare: Louis Kaplow, General
Characteristics of Rules, in G. de Geest / B. Boukkaert, International Encyclopedia of Law and Economics, Internet
Homepage.
63
In criminal and public law, the judge will be bribed by only one party to a better and favorable judgment, whereas in civil
law both parties can use their influence to make the judgment in their favor by bribing the judges. For example, 2 opponents
fight for a sum of money of 100 and both expect with a probability of 60% to win the process. The judge could make a fair
Chapter 1 Judicial System in Developing Countries and its Problems 19

not, especially when the standards are not precise enough. Thus, though precise rules may

have higher generating costs, it will deter judges from taking time to figure out whether the

standards are violated or not, thus avoiding the delay and corruption by speeding up the

process.

6. Law's Enforcement

Law's enforcement constitutes another problem nowadays. The effectiveness of law

enforcement does not only depend on the decision of the courts, but also on the behavior of

the law enforcing authorities, like land registries or enforcement officers. In some countries,

law enforcement bodies are under administrative authorities.64 Law enforcing authorities in

most of countries are subordinate to the courts.65 In many developing countries, the court

decisions or orders are difficult to enforce due to the following reasons: first, the enforcing

officers have weak discretion in dealing with the cases involving local interest and lack of

arbitrariness in enforcing the law, this has again much to do with the independence of

judiciary when the local governments or parties can influence the executors; secondly, it is

very common that the court's decisions or court's orders are difficult to enforce when the

respondents are out of the territorial limit of the original courts, the coordination of the courts

is weak in such situation. In China, crisis in enforcement occurred when the pending cases for

enforcement in 1998 reached a historical high.66 This forced the Supreme People's Court to

shift the judicial work to law enforcement, and within three months in 1998 from September

to December, the number of cases with court orders enforced or settled amounted to

1,200,000, but there were still around 530,000 pending cases for enforcement at the end of

1998.67 The size of the backlog for law enforcement amounted to 850,000 at the end of June

decision if he is either not bribed or if both parties offer him the same sum of money. In the later scenario, parties are put in a
game to keep their chance for a fair decision, the result is the increase of courts cost and demand for using court services will
be reduced. See Schaefer, H.-B., The Significance of a Well-Functioning Civil Law in the Process of Development, Paper
presented at the Conference of the Latin Americans Law and Economics Association in Quito (Ecuador( June 15th to June
17th 1998, Manuscript, 1998, p. 15.
64
For example, America, Canada, France set up the law enforcing bodies outside of the court, whereas most of the
countries like Germany, Japan, Taiwan and developing countries subordinate the enforcing bodies within the court systems.
63
It is perceived that the enforcing authorities are better to be subordinated to the courts rather than the administrative
authorities on the account of better coordination, since the bureaucracy will have the discretion to decide whether in certain
cases property has to be transferred, orders of attachment have to be enforced or courts decisions have to be executed.
66
The estimated number could be around 2 million cases. Also see statistics in: People's Judiciary, 1998, 1999, 2000.
67
Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 284.
20 Chapter 1 Judicial System in Developing Countries and its Problem

1999. The difficulties in law enforcement in China mainly can be attributed to bureaucracy
and the political motivation of the government in many cases; furthermore, a rough definition
of relevant law and regulations make law enforcement more difficult.69 From 1990 -1999,
around 70% of all courts decisions were enforced; this quota is even lower concerning cases
of economic issues, only around 50% of the cases were settled under enforcement
procedure.70 The same situation occurs in other developing countries, for example, in 1993
and 1994, only 50% of all court decisions were enforced in Poland and in Vietnam the quota
was even lower, around 40%.71
The inability to enforce court orders and decisions create the same problem as court delay, as
the general public foresee the lower probability of law enforcement, they lose confidence in
judiciary and distrust redress of suffering by the courts, consequently the demand for courts
services diminishes and settling the disputes out of the court often substitutes the courts
resolution.

Summary of the Problems of the Judicial System in Developing Countries


Generally speaking, increasing delays, backlogs and the uncertainty associated with expected
court outcomes have diminished the quality of justice; the judiciary is faced with several
obstacles, which include a dysfunctional administration of justice, lack of transparency and a
perception of corruption. All of these problems increase the costs to the parties using the
court services. People will react to this added cost by reducing their filings in the courts and
seek to solve the disputes out of the courts by ADR, by mediation or arbitration. Judicial
reform should therefore promote uniformity of law and enhance efficiency in jurisdiction, and
further enhance transparency and accountability in the process of enforcing laws. In a
transition economy, judicial reform is urgent and necessary to foster economic growth and
serve the long-term benefits of the people.

68
Ditto.
69
The stipulations in the Civil Procedure Code and the relevant regulations contain many gaps, which are often used by the
respondents as excuses for not following the court orders; some regulations are too abstract or not logical enough to be
applied in practice. See Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, pp. 257,
258.
70
It is based on the statistics issued by the Supreme People's Court in 1990 - 1999, the quota could even be lower in reality
as some of the pending cases were considered to be 'settled' due to long delay.
71
Compare World Development Report, 1997, p. 100.
Chapter 1 Judicial System in Developing Countries and its Problems 21
IV. The Impetus of Judicial Reform

Court delay impedes economic development due to lack of legal protection to the people in
general, and impedes the private economy as well as the functioning market. Civil crisis in
many countries reveals that in a dysfunctional judicial system justice are unavailable;
therefore, civil crisis is regarded in the same terms as the justice crisis. The crisis arises only
when judiciary deviates from the designed framework of justice. Thus, judicial reform shall
be aimed to improve the accessibility of justice and establish a well-functioning judicial
system to enhance the efficiency of the courts, in a way to foster the economic reform and
economic growth.

1. Access to Justice: Internal Impetus

The evaluation of civil process is based on: litigation cost, time needed for dispute resolution,
and the fact finding and application of law by the judiciary system.72 Civil crisis mainly
arises from a dysfunctional civil procedure and from structural problems in the civil
procedure, which result in court delay, a high litigation cost, and inequality in the judgment,
which hinders "access to justice". Civil crisis in many developing countries is attributed to
the structural and organizational problems originating from the division of power in
legislation, executive, judiciary, the political system, for example, the problem of interference
by the administration, corruption etc., is different from the nature of reforms undertaken by
Western countries which are aimed at improving the functioning capacity of the judicial
system, since civil crisis in these countries is much related to the design of the civil procedure
and the operation of court system. For example, in America the regulation of evidence results
in court delays and a waste of judicial resources, thus the reform focuses mainly on
procedural aspects so as to improve court efficiency. Whereas the judicial reform in
developing countries is much more complicated since these countries not only have to revise
and modernize the laws but also have to undertake political and economic reform, which may
cause some losers during the process of reform; moreover, the government officials may use

72
Leubsdorf, John, The Myth of Civil Procedural Reform, in Civil Justice in Crisis, ed. by Adrian A.S. Zuckerman, Oxford
University Press, 1999, p.55.
22 Chapter 1 Judicial System in Developing Countries and its Problem

the courts as rent-seeking mechanisms in the reform process.73


The reform efforts made by developing countries focus on revision of civil procedure mainly
within the time limit of disposition, pre-trial preparation, readiness of certificate, enhancing
judicial independence by budget autonomy and reducing influence by local governments etc.
The judicial reform which China is undergoing focuses mainly on civil procedural reform
with respect to the burden of evidence, judges' competence in the trial, jurisdiction system
and the litigation system. The reform concerning the trial system shall be regarded as part of
the judicial reform in China.
Judicial reform in China is much more complicated compared to the reform in industrialized
countries. It originates not only from the necessity to enhance "access to justice" and tackle
the problem of court delay, high litigation cost and enforcement of law, but also the necessity
to establish an impartial court system in which judicial independence can be guaranteed. The
reform faces great challenge since the problem of localism has damaged the uniform rules of
law and the authority of the judicial system, and the incompetence of judicial personnel lead
to low quality of judgment. The problem of interference and corruption has frustrated the
confidence of the general public. The functioning of the court is heavily affected by the
backward judicial administration and the insufficient budget supply to the courts; especially
the local courts are affected in their daily operations. All these problems indicate the
complexity of judicial reform in China.
As mentioned above, court delay is a common phenomenon in the world, especially in many
developing countries. In China, after more than 20 years of construction of legal system, the
country has improved greatly in modernizing of its judicial system, but problems like court
delay, piling of cases, poor administration, and corruption are still the obstacles for legal
reform. This thesis will focus on the reform of the legal system, specifically focusing on the
problem of court delay and its cost in China through an empirical study and comparative
analysis.

73
Buscaglia, Edgardo Jr., Law and Economics of Development, 1999, in: Encyclopedia of Law and Economics, p. 588.
(http://encyclo.findlaw.com/)
Chapter 1 Judicial System in Developing Countries and its Problems 23
Z Well-Functioning Legal System for Market Economy: External Force

A well-functioning legal system will enhance economic efficiency, since a modem market
economy requires laws to be able to constantly redefine rights and market relationship when
new forms of corporate structure emerges and provides ever-changing determinations of
contractual obligations, and extends them to new forms of financial instruments, tangible or
intangible property, and redefine and enforce the rights of victims of new technologies and
activities while protecting the environments from newly emerging risks.74 The judicial
reform shall therefore make the laws to be adapted to the dynamics of the social and
economic system.

74
Buscaglia, Edgardo Jr., Law and Economics of Development, 1999, in: Encyclopedia of Law and Economics, p. 564.
(http://encyclo.findlaw.com/)
24 Chapter 2 Legal System and Civil Process in China

Chapter 2

Legal System and Civil Process in China

In the absence of fundamental political reform that -would validate abandonment of the reigning ideology,

Chinese law is likely to ... remain an assortment of disparate institutions lacking some of the elements that

Western ideals take a s essential in a meaningful formal legal system such as hierarchy of sources of law,

differentiation from other organs of state power, procedural regularity and control of discretion in

decision-making, and adherence to professional values among the officials in the system. (LUBMAN)73

I. Introduction

A country's legal system plays an important role in adjusting social order and economic
development. A capable legal system will enlarge the range of anonymous market
transactions76 and reduce the market transaction costs with the rules.77 In China, high costs
in defining property rights and the difficulties in building up a well-functioning market
mechanism to large extent relate to the functioning of civil law. As China has more than 2000
years of Confucianism tradition, informal law still has a strong influence in Chinese society
today. For example, in urban areas, the resolution of disputes still relies heavily on customs,
morals, trust and reputation. 'It has admittedly been observed that the tradition of
Confucianism... leads to a dim view of law and a characteristic tendency to resolve disputes
otherwise than by recourse through the courts'.78 Due to the long tradition of Confucianism
and its influence on dispute resolution, the legal system does not work efficiently. The
influence of Confucianism sometimes even hinders the development of legal development.
From history, informal means of dispute resolution have a long tradition in China and are

73
Lubman, 'Studying Contemporary Chinese Law: Limits, Possibilities and Strategy', in: 39 American Journal of Law, 293
(1991).
6
North, D. Institutional Change and Economic Performance, Cambridge Univ. Press, 1996. Also see Schaefer, H.-B., The
Significance of a Well-Functioning Civil Law in the Process of Development, Paper presented at the Conference of the Latin
Americans Law and Economics Association in Quito (Ecuador( June 15th to June 17* 1998, Manuscript, 1998, pp. 1,2.
77
Coase, R., The Problem of Social Cost, Journal of Law and Economics, 1960, p. 1.
78
Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, p. 287.
Chapter 2 Legal System and Civil Process in China 25

enormously more important. The legal system in China has roots in its culture and social

background with distinctive features. The law in China "differs fundamentally from legal

families of Western laws which are used for purpose of dispute resolution by issuing a

conclusive and binding judgment and taken as a means of ordering social life".79 From

historical viewpoint, social relations are regarded as part of the natural order in China. Such a

view is found in the doctrines of Confucianism80, which has long tradition and strong

influence on Chinese social life and the development of legal system in China. Confucianism

was adopted as the ruling tool in Han Dynasty when Tun Chung-Shu (174 to 104 BC)

incorporated elements of his philosophical thoughts into Confucianism and produced a

doctrine of cosmic harmony.81 The suggestion of "abolishing other thoughts, only respect

Confucianism" was accepted by the emperor Han Wu (156 to 87 BC). Since then the thoughts

of Confucianism have ever since dominated the legal development and social life of the

Chinese for more than 2000 years. It is this form of Confucianism, which constituted the

ideology of the Chinese empire until the revolution of 1911. The long influence of

Confucianism has lead to a dim view of law and is also the main reason nowadays that formal

law is not fully respected. Although state law, or formal law, was also admitted by Confucians

to regulate human conduct, the ancient Chinese codes,82 which appertained to criminal and

administrative law, were invoked only where the state must impose a criminal sanction

because cosmic order has been very seriously disturbed, or where the organization of the state

administration is in issue according to Confucian doctrine.83 Comparatively, Western legal

systems are fundamentally different, social life should be regulated by the rules of objective

79
Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, pp. 286, 287.
80
Confucius lived from 551 to 479 BC. In the "Chun Qiu" time (770 to 476 BC) and "Zhan Guo" time (476 to 222 BC), the
law developed from custom law to coded law. The representatives of this time are Confucius and Meng, Ke (ca. 372 to 289
BC), who stressed on the importance of god, Wiseman, especially the importance of the rulers and its advisers, they also
stressed the importance of ethical education and argued that "ethics first, penalty comes to the second". On the contrary, the
representatives of the same time, Shang, Yang (390 -338 BC) and Han, Fei (280 to 233 BC) emphasized the importance of
law; they did not agree the importance of the wise and the God, but stressed on the force and constraining effect of the law.
81
The doctrine of cosmic harmony is a form of Confucianism which constituted the ideology of the Chinese empire until the
revolution of 1911. It starts from the proposition that man and God, Heaven and earth, all things living and inert are organic
parts of a harmoniously ordered and intergraded universe. The most important goal of man must therefore be to keep high
thoughts, feelings, and actions in perfect accordance with cosmic harmony; in particular men must so conduct themselves as
not to disturb the natural balance of their existing relations. The rules of 'proper' behavior were called i i ' and their content
characteristically depended on the social status of the person to whom they applied, his status in his family, in his clan, in the
neighborhood, in the official hierarchy, and in the state. Compare Zweigert & Koetz, An Introduction to Comparative Law,
Cambridge, 1999, p. 288.
82
Even before the imperial unification of China there were codes. In 221 BC the Ts'in (Qin) dynasty emerged and
centralized administration was set up; the regime also passed draconian laws. After Ts'in regime, legislation in each dynasty
was focused on criminal and administrative law.
83
Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, p. 290.
26 Chapter 2 Legal System and Civil Process in China

law rather than simply by conventions, habits, or mores. Admittedly some say, the tradition of
Confucianism leads to a dim view of law and a characteristic tendency to resolve disputes by
other techniques and informal means other than lawsuits,84 whereas in a modem market
economy, it is much more important to apply the formalistic law in disputes resolution since a
sound civil law system with disputes resolution by recourse of court services will provide
remedies to the parties in time and at the same time extend sanctions to unfaithful behavior.
Conversely, the failure of legal sanctions against would incur a high cost to the society. This
problem seems to be much more serious in China. "Trust Crisis", or 'Trust Failure", has been
a bitter topic in 2002, as many firms were under investigation in China due to improper
accounting and fraudulent behavior. The loss due to a disorder in the economy and a lack of
trust in market transactions caused a reduction in the quota of 10 - 20 % of the GDP, with
indirect and direct economic losses of 585.5 billion Yuan83 each year since then, which is
equal to 37% of the fiscal income of the state, and cause at least 2 % reduction in the GNP.86
Furthermore, law enforcement has become another obstacle of economic development, as the
investigation showed, in civil cases against firms arising from disputes of lending and
borrowing, banks won 95% of the cases, but only 15% of the court decisions were enforced.
'Triangle Debt"87 in China is about 1500 billion Yuan; the direct loss to banks in China
caused by bad debts, is about 180 Billion Yuan. Due to these facts, many firms require their
trade partners to pay cash against delivery in transactions and as a consequence additional
financial cost of ca. 200 billion Yuan incurred each year. These problems reveal the failure of
legal sanctions and the high cost of unfaithful behavior.88
The question is therefore raised here: what factors impede the functioning of the courts in
84
Zwcigcrt & Koetz, An Introduction to Comparative Law, Cambridge, 1999, pp. 287, 288,290.
83
One US Dollar is equivalent to 8 2 6 Chinese Yuan.
86
In an investigation initiated by the State Audit Bureau based on the analysis of balance of sheet, 68% of the 1290 firms
did not have proper accounting and violated the financial regulation; the concerned amount was in excess of 100 Billion
Yuan. It is an urgent agenda to solve the problems of fake accounting, repudiation of debt, conceiving in transaction,
cheating and abuse of market power etc. The illegal production of fake products is a typical case of "Trust Failure" in China,
the various loss caused by low quality products and fake products result in a loss of app. 200 Billion Yuan in China each year.
The foundation of social and economic trust is endangered by conceiving and cheating in contracts, tax-escaping and
cheating, smuggling, inside trade, price trap, cheating in the stock market and the local protection, etc.. See the report from
the Conference on 4 th of Jan. 2003 on the topic of "Economic Reform and Social Trust" held in the 5th New Year Forum in
Beijing University, in Internet Homepage: www.sohu.com (7 th of Jan. 2003).
87
"Triangle Debt" refers to the debts among three parties, normally involving banks, and firms. For example, Bank A had a
right over Firm B, Firm B had a right over Firm C, and the court ruled that Firm C should pay back to Bank A. Such
relationship existed in many stated-owned firms and the banks. It has been an obstacle of economic reform, especially the
reform of state-owned firms when the property rights are not clear in many cases.
88
Although the revised Criminal Law in August 2002 has strengthened legal sanction against repudiation of debt, but it does
not have enough deterring effect. In the case of spreading fraudulent information, there is no legal sanction available yet.
Supra note 86.
Chapter 2 Legal System and Civil Process in China 27

China? And why does the legal system fail to function well? To answer these questions, first,
a historical review of China's legal development will be addressed for the analysis. Since law
is closely related to the society, culture and religion through different phases of history, from
Confucianism to legal transplantation and the modernization of Chinese law Further, there
will be an examination of the anatomy of the current civil process with an introduction to
Civil Procedure Law in China. The problems facing the judiciary will serve as a basis for the
empirical study on the civil process in China with respect to court delay and its costs in
Chapter 3.

II. The Development of Chinese Legal System in Brief

To anthropologists, law is an active cultural phenomenon. To sociologists, law is a 'Sein',


namely, it is concrete social facts and social norms. But according to judicial dogmatists
(Rechtsdogmatiker), law is considered a strictly logical 'Sollen', in another words, the culture
and the whole society are the background of the law. The judicial system is intertwined with
politics, economy, religion, and morality etc.
As mentioned by Chinese scholar Liang Su Min, 'China is a family based society', for more
than 2000 years, the society hasn't changed too much. Confucianism and law are paralleled;
in fact law is considered assistance to Confucianism and social norms.
Agricultural societies are seen as "anti-litigation-societies", harmony is considered to be the
most important element of society, and even such harmony appears only on the surface. It is
better that conflicts are settled privately, so that society seems to be in a harmonious state.
Individual conflict is 'contained' in the family, village or business. Such conflicts are solved
mainly outside the courts. Disputes should first be solved by the head of the family who acts
as conciliator, or else a more remote relative or even outsider who is so respected because of
their age or high standing in the region or on other grounds that there is no 'loss of face' to
either side in accepting the compromise proposed by the conciliator.89 Though the imperial
courts were open to the parties, the parties had to consider his behavior would be castigated
by the tight community of which he/she was a part and thus they would sue only in cases of

89
Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, p. 291.
28 Chapter 2 Legal System and Civil Process in China

desperation. Compromises were more easily made under the conciliators whose prestige
enabled them to provide considerable social and moral pressure on the parties. Furthermore,
conflict-resolution outside of the courts would also be a benefit to the parties since the court
procedure had a reputation of being extremely time-consuming and expensive. In traditional
Chinese society, private settlement outside the courts was an important feature of dispute
resolution. Individuals stayed rooted in their narrow social context; they disregarded the law
and try to stay far away from the law. Such tradition, as already mentioned, is rooted in the
Chinese culture, political system and its religion, and such tradition rooted in the social norm
and culture shall not be ignored when discussing the rule of law in China.

1. From 2100 BC until 1911: Historical Review

To get a general idea of the legal system in China, a brief review of the legal development
follows, from the ancient times to the time before the PR. China and the period after the PR.
China is established.91

a) Legal Development from 2100 BC to 221 BC


The Chinese legal system can be traced back to 21 BC when the empire of Xia , Shang and
Xi Zhou were established. During this time, the law was mainly used to impose criminal
sanction in order to deter the power of political enemies. During the empire of Xi Zhou (1100
BC to 771 BC), regulations and ethics (moral principles) were established and administered
throughout the country. Such regulations covered from important affairs of the empire even to
unimportant private matters. Ethics were used as a tool for educating the people to obey and
follow the rules.92 In the time of Chun Qiu (770 - 476 BC, shortly after Xi Zhou), custom
law was transformed initially into coded law,93 which is similar to the codification of Roman
Law. These old codes did not survive fully and most of them were lost, but there succession
was unbroken in the following dynasties. The most influential person in legal development
during this time was Confucius, who argued that "ethics" should be the main principle for the
90
van der Sprcnkel, S., Legal Institutions in Manchu China, A Sociological Analysis, London, 1962.
91
For a detailed review of the legal development in China, see Zeng, Xian Yi (eds.), The History of Chinese Legal Thoughts,
China People's University Publication, 2000.
92
See Sheng, Zhong Ling, Research on Comparative Law, Beijing University Press, 1998, p. 433.
93
Ditto.
Chapter 2 Legal System and Civil Process in China 29

society94 and should be supported by criminal sanction (Penalty law). Though many
contemporary legal scholars are of the opinion that competition between Confucius and the
law is similar to the confrontation between natural law and positive law in Western countries;
however, it is wrong to make such a judgment, since Confucius advocated 'rule by man'
rather than 'rule by law', whereas both naturalism and the positivism hold 'rule by law' and
democracy to be most important. In the Confucian context, it was believed that man was
intrinsically good and could be brought by education of the example of the rulers to see the
need for virtuous conduct. The ethical man in the eye of Confucianism should resolve dispute
equitably by peaceful discussion rather than by insisting on his rights or by calling in a judge.
"Anyone who disturbed social tranquility by calling in a state court and trying to put a
fellow-citizen in the wrong was regarded as a disruptive, boorish and uncultivated person
who lacked the cardinal virtues of modesty and readiness to compromise."95 This is a
so-called "anti-litigation-society". In the past 2000 years, law has served only as a tool to
consolidate the feudal autocratic monarchy.

b) Legal Development in Feudal Society from the Ts'in (Qin), Han Dynasty until End of
Qing Dynasty (221 BC until end of 19 century)
In 221 BC, the dynasty of Ts'in (Qin) unified China from wars with rival territorial princes
and a centralized feudal autocratic monarchy was established in this imperial state. It was the
first time in history that the state was under a unified rule. This feudal autocratic monarchic
system continued for more than 2000 years until it was ended in 1911, when the capitalism
revolution broke up in China
In the following dynasties after Ts'in dynasty, one of the most famous coded laws, Tang Law,
was written during the Tang dynasty (618 - 907 AC). It was the first most complete judicial
work in Chinese history. The law was based on the main principle of Confucian using "ethics
as a main tool, supported by penalty sanctions". Tang Law and its explanation have reached
top legal development since the beginning of the era of Chun Qiu and has become a law

94
The so-called "San Gang Wu Chang" means the three cardinal guides (ruler guides subject, father guides son, and
husband guides wife) and the five constant virtues (benevolence, righteousness, propriety, wisdom and fidelity) as specified
in the feudal ethical code. See Zeng, Xian Yi (eds.), The History of Chinese Legal Thoughts, China People's University
Publication, 2000.

Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, p. 289.


30 Chapter 2 Legal System and Civil Process in China

model for the dynasties that followed such as Song, Yuan, Min, Qing. Besides, Tang Law has

had strong influences on neighboring countries like Japan, Korea and Vietnam etc.; therefore,

in many research works, the Chinese feudal legal system represented by Tang Law and those

laws enacted by other countries based on this model are called 'Chinese Law Family".96

From review of judicial development, one can find that the law developed in the Chinese

feudal autocratic monarchy has had a big difference on laws in other countries, especially the

laws during the Middle Ages in Western countries. First, the autocratic monarchy in China

dominated the society for more than 2000 years. "The old China leaves us more of feudal

autocratic tradition, but less of a democratic legal system".97 Second, in its long history,

China has been more or less united since the Ts'in (Qin) Dynasty of 2000 years ago. The

advantage was obvious, the unification promoted the unity of China and its culture, but

unfortunately it resulted in the monopoly of law in the long feudal autocratic monarchy. In

contrast, in the legal development in Europe, different laws existed simultaneously in the

Middle Ages, laws competed with each other in a process of learning and evolving, whereas

the Chinese feudal society closed itself to the outside world and rejected influences from

other cultures, consequently it was not possible to have a law similar to Roman Law which

had great vitality originating from the process of competition and evolution.98 Third, since

the Han Dynasty, which ruled the country for more than four centuries, the Confucian

doctrine became the ideology of the state and the guiding directive in the judicial field. The

spiritual and philosophical basis of the Chinese state was challenged only in the 19th century

by the influence of capitalist culture.99 The long tradition of the doctrine of cosmic harmony

has resulted in a dim view of law in respect to litigation, protection of legal right by law,

jurisprudence, etc. Unlike in many Western societies, the domination of Christian theology

was challenged by judicial theory during the capitalist revolution in the 18th century. Fourth,

in the Chinese feudal society, penalty law was the dominating law and all other forms of laws

like civil, administrative and procedural law were all annexed to penalty law 100 To the

contrary, in the history of Continental Law, private law has had a dominating position in the

96
Sheng, Zhong Ling, Research on Comparative Law, Beijing University Press, 1998, p. 436.
97
Abstracted from: Selections from Deng Xiao Ping, Book 2, p. 332.
98
Sheng, Zhong Ling, Research on Comparative Law, Beijing University Press, 1998, pp. 4 4 3 - 4 4 6 .
99
Zweigert & Koetz, An Introduction to Comparative Law, Cambridge, 1999, pp. 288,292
100
Sheng, Zhong Ling, Research on Comparative Law, Beijing University Press, 1998, pp. 4 4 3 - 4 4 6 .
Chapter 2 Legal System and Civil Process in China 31

long term development. Even in the English Common Law system, which is independent of

continental law, private law has also played a very important role in England's legal system.

The development of commercial law in Western countries to a large extent has promoted the

development of capitalism and fostered trade, whereas the law in Ming (1368 - 1644) and

Qing Dynasties (1616-1911) even became obstacles for the development of capitalism due to

its restrictions on business development.101

2 Legal Transplantation (1911-1949)

Legal transplantation in China occurred in the 1911 when the feudal system was overturned

and abolished by the revolutionary capitalism movement.102

After the Opium war,103 China went from a country with a feudal society to a half colonial

and half feudal society. Under social pressure, the government established the first law school

in China and invited law professors to teach students for the purpose of translating and

introducing foreign laws into China. The main goal was to unite the Chinese traditional legal

system with the Western civil law system by revision of its existing laws and enacting new

laws. Unfortunately, these laws were unable to be enacted due to the downfall of Qing

dynasty and the establishment of the Republic of China (1911 -1949) led by Guomintang or

the Nationalist Party. Again in the 1920s, the government of the Republic of China enacted

laws by invoking Western laws, namely continental law and to some extent accepted the

judiciary principle and system of civil law, for example judicial independence, public

hearings, lawyer system, judicial review etc.. The whole of private law was codified

following Japan's example taking advantage of the Japanese experience. The Codes were

principally based on German and Swiss Law.104

101
The emergence of capitalism began in Ming dynasty. In Qing dynasty, from abut 1860 China had to enter many 'unequal
treaties' with Western powers and opened up ports and trading centers. The national capital emerged under the influence of
Western capitalism.
102
It is argued that legal transplantation and the adoption of civil code would assure as quickly as possible a minimal
security of social relationship. See Faundez, Julio (ed.), Good Government & Law: Law and Institutional Reform in
Developing Countries, Macmillan Press Ltd., 1997, p. 3.
103
The opium war broke out in 1839 and ended in 1842 between the Qing Dynasty and the Britain.
104
Buenger, Zivil- und Handelsgesetzbuch sowie Wechsel- und Scheckgesetz von China (1934), in: Zweigert & Koetz, An
Introduction to Comparative Law, Cambridge, 1999, p. 292. Compare: Zeng, Xian Yi (eds.), The History of Chinese Legal
Thoughts, China People's University Publication, 2000, & Sheng, Zhong Ling, Research on Comparative Law, Beijing
University Press, 1998, pp. 435,436.
32 Chapter 2 Legal System and Civil Process in China

3. The Current Legal System inER China (from 1949)

a) Socialist Law (since 1949 until 1978)


After the P.R. of China was established in 1949, China took most of it's laws from the Soviet
Union. All the legislation of the National Party period was abrogated due to being
'reactionary' and 'Western in spirit'. In 1950, apart from the marriage law nothing was put in
its place. In the 1950s, criminal code and procedure codes were promulgated but it ground to
a halt when the 'Culture Revolution' began in 1960s. In the beginning of 1950s, most of the
filed cases were criminal cases. Civil cases were mainly solved through the People's Arbitral
Committees, which were set up throughout the whole country in 1953. The courts were under
the administration of higher courts and the local governments with a pattern defined as
"double leadership".105 The development of the legal system was interrupted during the
'Cultural Revolution' from 1969 to 1978 and the apparatus of justice, which had been created
in the Soviet image, broke down completely during this period.

b) The Second Phase of Legal Construction and Transplantation (Since 1978)


A gradual but profound reform of China's legal system has been undertaken since the
"Culture Revolution" ended in 1978. After more than 20 years of legal reconstruction, the
country is in the midst of a slow and gradual process of establishing a solid legal
infrastructure to facilitate economic and social development. Many laws have been enacted or
revised according to the new social and economic situation. In recent years, the speedy
enactments of laws aiming at a sound legal system has been based on Western models and in
many respects the law has made room for entrepreneurial initiative.
The current Chinese Constitution has experienced several revisions after being enacted in
1954. It was revised in 1975, 1978, 1982; and further amendments were made in 1988 to
accommodate the change in the social and economic system The latest revision has been
made in March 2004 and it is the first time in the history that the constitution clearly
guarantees that the lawful private wealth shall be protected by the state. Administration law

103
It was stated in the Regulation of Court Organization (1951) that the Courts at each level should be under the
administration of the governments at the same level, although the Constitution promulgated in 1954 addressed the principle
of independent jurisdiction of the courts, in reality the courts were constrained by the local governments with respect to
personnel and budget. The reliance of judiciary on the administration leads to difficulty in the jurisdiction, especially relating
to administrative cases.
Chapter 2 Legal System and Civil Process in China 33

was almost blank in the past until the Administration Procedure Code was enacted in 1990
and Administration Review Act was enacted in 1999. Administrative cases must now be
disposed in the administrative tribunals, which are annexed to the civil courts.
In the early 1980's, a criminal code and a code of criminal procedure were introduced.106 An
amendment to the Criminal Code in 1991 has abolished some articles and adopted some of
the general principles and the spirit of Western penalty law. The Criminal Procedure Code
was enacted in 1979 and was amended in 1996.
Finally, a court structure based on the Civil Procedure Code (draft) came into force in 1982
and much was amended in 1991. The Civil Code was drafted in 1986 and is divided into 9
Chapters with only 156 Articles.107 However, Civil Procedure Code faces many critics
because of its rough legislation in many aspects, especially in respect to evidence, filing and
disposition, duration, litigation cost, etc..
Amendments and new enactments in legislation since the 1980's are partly based on the
experience of others countries. The new enactments and amendments in economic law are
mainly a result of a learning process by adopting and integrating most of the internationally
recognized trade laws into its legal system108

III. Civil Procedure Code (1991) and Civil Process

The procedure law involves the structure of the courts and is considered to be the most
important branch of law, and is regarded as the heart of the legal system109 It is therefore no
surprise to see that many countries are reforming and improving their procedure laws to
enhance the efficiency of their legal systems.

106
The criminal code was under draft in 1950 but was interrupted. In 1979 the code was promulgated. In 1991 amendment
was made.
107
The Civil Code in translation is: "General Rules on Civil Code". It consists of the traditional and general rules like the
BGB, together with some specific regulations on civil matters. Unlike many codifications in Western civil law countries, the
Chinese civil code is not systematically enacted, for example, family law and contract law are separately enacted and are not
incorporated in the civil code. However, the discussion of codification of civil law .similar as the model of German BGB, is
under way.
108
This is much obvious after China joined WTO in 2001 and then revised most of its economic laws to conform with
international standards.
109
Gilles, Peter, Prozessrechtsvergleichung, Prozessrechtliche Abhandlungen, Prueting,
Koeln-Berlin-Bonn-Muenchen, 1995, p. 50.
34 Chapter 2 Legal System and Civil Process in China

1. Objectives and Functions

The main objectives and functions110 of Civil Procedure Code are mainly summarized as

follows:

a) Protecting the Litigation Right of the Parties

It is a basic constitutional right for people to be able to protect their own legal rights

through litigation and by recourse through court services. The civil procedure law,

therefore, provides a fair mechanism for fact-finding and protection of legal rights.

b) Procedural Guarantee for Jurisdiction

Civil Procedure Code is a procedure law, which provides procedural rules and procedural

guarantees for the jurisdiction of civil cases, fact-finding and appropriate application of

the law. The procedure applies general rules to public hearings, collegial panels, two-tier

jurisdiction in civil litigation and procedural rights in trials, appeals, retrial procedures

etc.

c) Court Remedy

The Court is to define the rights and liabilities among the parties and the disputes are seen

to be resolved only when the rights and obligation of the parties are defined through civil

procedure; further, through application of law, legal sanction is imposed against unfaithful

behavior and breach of law, and thus the legal rights of the parties are protected after the

trial.

d) Legal Education

Civil Procedure Code further serves the purpose of legal education to the general public,

since the civil process is a process of realization ofjustice,111 and through public hearings

and trials the general public will able to get more procedural and substantive legal

knowledge, and in the meantime avoid civil disputes.

Z Structure of Civil Procedure Code

The current Chinese Civil Procedure Code was drafted in 1982, but was not enacted until

Art. 2 of Civil Procedure Code.


Cai, Hong and Li, Han Chang, Civil Procedure Code (Text Book), China Judiciary Publication, 1999, p. 32.
Chapter 2 Legal System and Civil Process in China 35

09.04.1991 after 9 years of practice.


The Structure of the Civil Procedure Code 1991 can be briefly described as follows:
Civil Procedure Code (1991) is divided into 4 Sections, with 29 chapters and 270 articles.
Table 2.1 gives a brief description of the Civil Procedure Code (1991).

Table 2.1 Activities of the Courts under Civil Procedure Code


the District the Intermediate the High the Supreme
Courts Courts Courts Court
Jurisdiction: (a) Pecuniary: up to 3 million up to 30 million up to 50 no restriction
RMB RMB million RMB
(b)Non-pecuniary

| Member of Collegial Panel: 3 to 5 judges 3 to 5 judges 3 to 5 judges 3 judges


Trial: All the four hierarchies have the jurisdiction on trial cases
Appeal: within 15 days after the date of court order;
2-tier system, the jurisdiction of appellate court is final
Retrial: The parties can raise a petition to have a retrial under judicial
supervision procedure if the judgment is not persuasive |
Limitation of Period: within 2 years after the dispute arises (otherwise the litigant loses the
procedural right) |
Time Limit for Disposition: 6 months for trial cases and 3 months for appeal cases
Decision of the Courts and the
Burden of Cost:
a In favor of the litigant: The losing parties shall compensate the loss and the court fees to the
litigant in accordance with the court decision. Lawyers' fee is normally
borne by each party. |
b The litigant withdrawn: The litigant can withdraw the case from the court, he can also proceed
an out of court settlement The litigation cost will be on the account of
the litigant
c Against the litigant: the litigant has to bear all the costs in connection with the lawsuit
d Dismissed: The case can be dismissed by the court in case of non-conformity of
procedure |
Enforcement of the Judgments: The party shall follow the court orders/decisions. In case of rejecting to
comply with the judgment, the winning party may apply for compulsory
enforcement. The judges or executors shall notify the party to perform
his duty within the appointed time limit. In case of failure to perform
within the deadline, compulsory enforcement will follow. 1
In case of despise of court orders by illegal actions against the
Penalties: enforcement or by violent means, additional penalties or legal sanctions
can be imposed against the debtor
36 Chapter 2 Legal System and Civil Process in China

3. Court System
According to the regulation of Civil Procedure Code, the jurisdiction of the courts in China
has some distinctive features in contrast with other civil law countries, especially in respect to
judicial hierarchy, two-tier jurisdiction, collegial panel, trial committee, retrial procedure etc.

a) Judicial Hierarchy
The establishment of court system is based on the Constitution Law and the People's Court
Organization Act.112 According to the People's Court Organization Act, the courts are
divided into four hierarchical levels, which consist of the Supreme People's Court, the High
People's Court (provincial level), the Intermediate People's Court (city level) and District
Court/County Court.113 The so-called "local courts" in each province are divided into 3
hierarchical levels, namely the High People's Court, Intermediate People's Court and District
People's Court (including the court in each county in China). The Supreme People's Court
supervises the jurisdiction work of all local courts; the jurisdiction work of lower courts is
subject to the supervision of higher courts in each province and autonomous region.
The jurisdiction follows the principle of "4 hierarchies, 2-tier jurisdiction", which means that
the appeal judgment is deemed to be final. As an exception, the judgment made by the
Supreme People's Court shall be final in any case.114
Unlike Western civil law countries, the courts in China have no distinction between review of
the facts and the application of law in appeal cases; in the appellate phase, judges can review
both fact-finding and the application of law. In Germany, for example, the courts distinguish
3 types of appeal, namely: 'Berufung' - review of the facts and application of law; 'Revision'
- review of application of law; 'Beschwerden' - complaint of unfair judgments to the
Supreme Court. 115 Furthermore, in German Civil Procedure Law (ZPO), under a
"leap-frogging" procedure, Art. 556 allows the parties who file in the County Court or
District Court to appeal directly in the Federal Supreme Court and by pass the Court of
Appeal if the parties only disagree on the law.

112
It was enacted in 1979 and amended in 1983.
113
Besides civil courts, special courts like maritime courts and railway courts are established in some big harbor cities or
railway transportation centers for the jurisdiction of relevant cases.
114
Art. 21 of the Civil Procedure Code stipulates that the Supreme People's Court has jurisdiction over complicated trial
cases, or when it is necessary for the court to conduct the trial. But until now there are no trial cases filed or accepted by the
Supreme People's Court.
113
The German ZPO distinguishes the appeal between Berufung (appeal petition against fact and application of law),
Revision (appeal petition against application of law) and Beschwerden (complaint against the court decision). See Art. 511,
543, 567 German ZPO, Baumbach/Lauterbach/Albers/Hartmann, Zivilprozessordnung, Verlag C.H. Beck, 61. Auflage, S.
1549-1656.
Chapter 2 Legal System and Civil Process in China 37

b) Collegial Panel
In the organization of trial, either a Collegial Panel will be formed to proceed with the trial, or
a single judge will be appointed by applying a simple procedure.
In the first instance, except in simple cases which are able to be under the jurisdiction of a
single judge, a collegial panel must be formed to make a judgment on the case. A collegial
panel consists of judges or judges together with jury.116 If an appeal case is returned by the
appellate court to the court of original jurisdiction, the collegial panel must be newly formed
to re-open the procedure.
In the appeal stage, a collegial panel shall also be formed to review the case117 to decide
whether the decision made by the court of the first instance contains any mistake in the
application of law. Besides, each court has a Trial Committee responsible for summarizing
experience and discussing complicated cases or other judicial work.
In the retrial procedure,118 a new collegial panel shall be formed to review the court
judgments or decisions made by the courts of the first instance or the appellate courts; or a
collegial panel shall be formed in the higher courts under supervision procedure for retrial
cases.
Further, it is regulated by the law that the judges or the relevant personnel of the courts119
shall not take part in the litigation in special circumstances, for example, when the parties or
the lawyers are their relatives or if personal interest might be involved in the cases, or their
presence may affect the fairness of the judgment;120 besides, in the retrial procedure, judges
involved in the jurisdiction of the case shall not be present in the newly formed collegial
panel for retrial.121

116
Generally speaking, for those complicated cases, the collegial panel shall be formed with judges and some jurors who
have relevant knowledge or expertise. The law does not stipulate the proportion of the jurors and judges in the collegial panel,
and the number of jurors is subject to the necessity of the court, normally 2 to 5. In reality, jury system does not play an
important role in the jurisdiction due to the problems of organization, budget constraint and possibility of causing court
delay.
117
Art. 41 of Civil Procedure Code stipulates: "Collegial Panel shall be formed when the people's court makes judgment on
the appeal cases".
118
Retrial procedure, according to the explanation of Civil Procedure Code, is a procedure under which the cases shall be
reviewed if the court finds any mistakes in its judgments or mediation agreements, which are legally effective. Retrial
procedure can be held either by the court of first instance, or by the appellate court, or by the higher court. But in practice,
the parties file for retrial normally after appeal, therefore the retrial cases are normally under the jurisdiction of higher court
119
They are jurors, clerks, translators, appraisers, and inspectors.
120
Art. 45 I of Civil Procedure Code.
121
Art. 41 n, III and Art 184II of Civil Procedure Code.
38 Chapter 2 Legal System and Civil Process in China

c) The Trial Committee


The Trial Committee is established in each court for the purpose of a collective decision on
complicated cases, which encounter difficulties in the application of law by the judges.
Normally it consists of the president of the court and members from collegial panels. The
Trial Committee is to discuss cases (but is not to make any decision) and provide advice to
the judges who are responsible for the trial of the cases. In practice, the court decisions are
very often made by the Trial Committee rather than by the judges or the collegial panels. The
involvement of Trial Committee has been viewed as a contradiction to the spirit of judicial
independence and causes a lengthy procedure in trial.

d) Retrial Procedure
The preconditions for retrial of a case are regulated in the Supervision Procedure in the Civil
Procedure Code.122 The purpose of retrial is to correct mistakes found in the original court
orders/decisions, which are already effective and binding on the parties and the retrial
procedure is to provide substantive and procedural justice to the parties. In practice, the
parties may make use of the retrial procedure and apply for retrial again and again, and
challenge the finality of law. It is criticized that such overstress of substantive justice leads to
a long duration in court and a waste of judicial resources.

4. Litigation Cost

Litigation cost is mainly regulated in the Civil Procedure Code 1991123 and the Regulation
on Litigation Cost (1989). The rationale of the litigation cost is to relegate part of the cost
burden as 'taxation" on the court users. It would be unfair if society were burdened with all
of the costs since most people do not go to court during their life. Litigation costs borne by
the parties are mainly categorized as follows:

a) Litigation Fee
The fee charged against the litigants can be divided into two types: the first is a litigation fee
for non-pecuniary cases such as divorce,124 infringement of personal rights,125 patent,
122
Art. 177-188 of Civil Procedure Code.
123
Art 107 of Civil Procedure Code: " The parties shall pay litigation fee according to the regulation in the civil
litigation...". Thus, the Regulation on Litigation Cost (1989) is the base for the calculation of litigation cost.
124
10 to 50 Yuan will be charged for each divorce case. However, 1% will be charged for the part over 10,000 Yuan if the
Chapter 2 Legal System and Civil Process in China 39

copyright, trademark,126 labor disputes127 and other categories of non-pecuniary cases. 128

The second type relates to pecuniary cases. The litigation fee of pecuniary cases is calculated

according to the 'Dispute Value' as stipulated in the Regulation of Litigation Cost (1989). In

case of security of title, the applicant must prepay a fee based on the value of the title.

There is fee shifting according to the outcome of the judgment. Normally, the losing party

must bear the litigation fee if the litigant wins the case. However, judges in China have the

discretion to allocate the litigation fee among the parties according to the degree of liability in

causing the dispute.

b) Other Fees
Besides the litigation fee, there are still other fees relating to litigation. According to the

Regulation on Litigation Cost (1989) and Some Opinions on the Application of Civil

Procedure Code and the relevant regulations of the Supreme People's Court, some actual

costs incurred in the litigation shall be borne by the parties. These court fees mainly incur in

the following litigation procedures:

(1) Application for Execution

According to Regulation on Litigation Cost, extra fees must be paid in case of application for

execution of court orders/decisions. For cases with a dispute value under 10,000 Yuan, each

case will be charged 50 Yuan; for cases with dispute values exceeding 10,000 Yuan, an

additional 0.5% will be charged to the part exceeding 10,000 up to 500,000 Yuan and 0.1%

will be charged for the part exceeding 500,000 Yuan.130

In case of compulsory execution of arbitration awards made by arbitration authorities, or

debts in notarized form, or penalties ordered by the courts, the fees are regulated by the

judicial administration separately and differ from court to court and region to region.

(2) Application for Security of Title

The parties must prepay a part of the fee in case of application for security of title. When the

divorce case further relates to division of family wealth.


125
Personal rights are related to the right of name, copyright, personal pictures, fame and honors etc. Each case will be
charged SO to 100 Yuan.
126
For cases concerning infringement of patent, copyright and trademark, each case will be charged SO to 100 Yuan
127
Each case will be charged 130 to 50 Yuan.
128
Each case will be charged 10 to 50 Yuan.
129
It was issued by the Supreme People's Court on 14.07.1992. The regulation is regarded as official judicial interpretation
of the Civil Procedure Code which is aiming to solve the problems arising from civil process.
130
Art. 8 of Regulation on Litigation Cost (1989).
40 Chapter 2 Legal System and Civil Process in China

property value for security of title is under 1000 Yuan, 30 Yuan will be charged; additionally,
1% will be charged for the part above 1000 up to 100,000 Yuan, and 0.5% will be charged for
the part over 100,000 Yuan.
(3) Seizure of objects in Maritime Issues
For seizure of vessel, 1000 - 5000 Yuan will be charged for each case; 500 Yuan will be
charged in case of claim against the ship owner; for detaining the cargo or fuel, 500 Yuan will
be charged for each case; and it should be not less than 500 Yuan in case of application for
limiting the owner's liability.
(4) Other Actual Costs
Besides the above mentioned fees, in property cases, the actual expenses incurred in the
litigation are on the account of the parties, whereas in non-property cases, part of the
expenses will be borne by the state. According to the Regulation on Litigation Cost (1989),
the expenses to be borne by the parties are:
- Inspection fee, appraisal fee, announcement fee, translation fee and other fees according
to the administrations.
- The actual expenses incurred in the civil procedure related to the cases,
- The actual expenses incurred for security of title, advance execution.
- Expenses from copy of materials and legal documents
- Expenses (transportation, accommodation, living allowances, and allowances for absence
from work etc.) for witness, appraiser, translator.

c) Prepayment of Litigation Fee


(1) Prepayment of Litigation Fee
The party who files at the court shall prepay the litigation fee within 7 days after having
received the notification of requesting payment.131 Otherwise the case is considered to be
withdrawn, if the litigation fee is not paid within those 7 days. The party who appeals to the
higher court shall also prepay the litigation fee within 7 days to the appellate court after the
petition. Otherwise the case is considered to be withdrawn if the litigation fee is not duly
paid.
131
The exceptions not to pay litigation fee in advance include: i) cases concerning class action when the number of persons
are not clear, ii) cases concerning claim for living expenses and remuneration; iii) cases concerning corporate bankruptcy, in
which the litigation fee will be charged from liquidation.
Chapter 2 Legal System and Civil Process in China 41

The prepaid litigation fee shall be transferred to the appointed court in case of assignment of

the cases.132 The litigation fee will not be reimbursed by the court in case of withdrawal or

dismissal of case. Further, if the case is remanded by the appellate court to the court of first

instance for reopening of the procedure, the litigation fee prepaid to the appellate court will

not be returned; but the party does not have to pay the litigation fee again in the case of

appeal after the retrial procedure. The litigation fee will be shifted to the losing party if the

litigant wins the case.133

For the application fee in case of security of title, seizure of the vessel, registration of debt,

lien on goods and fuel etc., the applicant shall prepay to the court.

(2) Prepayment of Other Fees in Litigation

In case of possible costs arising from inspection, appraisal, announcement, translation,

transportation, accommodation and allowances etc., the courts will ask the parties to prepay

these costs according to the standards regulated by the state; with respect to the expenses for

copy of materials and legal documents, the court will also inform the parties to prepay the

fees according to its cost calculation.

(3) The Administration of Litigation Fee

The actual litigation fee will be calculated after the completion of the legal procedure and the

parties shall cover the difference if the prepaid sum is not enough. However, the parties have

the right to ask the courts to review the calculation in case of disagreement.

According to the Regulation of Litigation Cost (1989), all payment to the court shall be

transferred into specially appointed accounts in a bank under the uniform administration. The

local government and its audit authorities have the right to supervise the use of litigation fees.

5. Duration of the Civil Process

Under the current judicial system in which a 2-tier hierarchical system is applied in the civil

process, the duration of a case is strongly influenced by the time consumed in the court of

first instance and the appellate court.

132
Art. 36, 37,38 of Civil Procedure Code.
133
As mentioned previously, judges may allocate the fee among the parties according to the degree of liability causing the
dispute.
42 Chapter 2 Legal System and Civil Process in China

According to the Civil Procedure Code and the normal practice, the duration is divided into 5
phases.

a) Filing and Acceptance of the Cases


After receiving the claim of the litigant, the court shall check whether the claim is in
accordance with the conditions stipulated in the Civil Procedure Code and shall reply to the
litigant within 7 days whether the court accepts or rejects going further to the next step in the
procedure of civil litigation.134

b) Pre-trial Procedure
Before hearing the case, judges shall prepare for the trial in due time by forming a collegial
panel, investigation of the facts and collecting evidence and informing the parties to take part
in the litigation. After the court accepts hearing the case, it should send the content of the
claim to the respondent. The respondent is asked to provide arguments against the claim
within 15 days.135
At the same time, the court shall also inform all of the relevant parties to participate in the
hearing and inform them of their rights and obligations the parties might have; further, the
court shall also inform the parties of the composition of the collegial panel136 so as to avoid
unnecessary appearance(s) of court personnel at the request of the parties.
The Court shall check the relevant litigation materials and find out the central point of dispute
and applicable laws and regulations for the case. Further, apart from the evidence, which shall
be collected by the parties, the court shall collect evidence within its discretion.137
It is also a common practice that the parties shall exchange their certificates and evidence in
advance if the case is complicated.138 Those evidences and certificates, which are not
134
Art. 108, 110, 111 of Civil Procedure Code (1991).
133
Art. 113 of Civil Procedure Code (1991).
136
The court shall inform the parties within 3 days of the composition of collegial panel, according to Art 115 of Civil
Procedure Code.
137
Art. 64, II of Civil Procedure Code: "Evidence shall be collected by the courts if it is beyond the ability of the parties and
their representatives.or the evidence can be collected by the court if the court regards as necessary". It is criticized that the
courts have too big discretion under such regulation and could induce corruption.
138
In the current judicial reform in Chinese courts, "One Step to Court" is commonly adopted by the courts. It means that
before trial begins, the court shall not contact the parties and read any evidence. All claims together with evidence shall be
shown only during the trial. The judges shall examine the evidence only until the trial begins. Such reform enhances the
obligation of the parties in evidence collection and avoids the prejudice of the judges. It is argued that such pattern of trial
helps to curb corruption since the judges cannot have pre-trial contacts with the parties. However, it should be pointed out
that "One Step to Court" procedure is applicable for simple and easy cases, but it is not efficient to apply such procedure in
complicated civil cases like class action, complicated contract disputes, product liability and severe accidents, since these
complicated cases need more time for the parties to narrow the arguments so as to save time and avoid delay. On the other
hand, the parties may also reach an agreement (reconciliation) even if the cases are complicated, it is not necessary to open
Chapter 2 Legal System and Civil Process in China 43

exchanged before trial are not allowed to be presented in the hearing. Such a system is used
in order to identify the central point of disputes and avoid the hiding of important evidence
for the purpose of winning cases by sudden tactical procedural assault on the other party.
The experience in the Western countries shows that the two main legal systems (Civil Law
system and Anglo-American Legal System) do not adopt a direct trial procedure in the court;
on the contrary, the courts have adopted pre-trial procedure before the trial in the court.
Article 16 of American Federal Rules of Civil Procedure confirms the pre-trial procedure. In
an assessment made in 1983,139 it was concluded that the pre-trial procedure has been very
effective since its application. Pre-trial procedure helps to avoid sudden procedural assault by
showing unknown evidence. It further reduces the times of disposition and also saves time of
trial by focusing on the central point of dispute, as well as avoiding re-opening of the
procedure and court delay etc. Specifically, pre-trial procedure may even help the parties to
reach reconciliation before appearing in the court.140 Of course, pre-trial procedure is much
more suitable for complicated cases, whereas for simple cases, such procedure seems to be
excessive. The Continental legal system also adopts the practice of pre-trial procedure in
litigation. For example, the German Civil Procedure Code (ZPO) used to have a continuous
trial before the American experience was adopted, but after the amendment of its Civil
Procedure Code, pre-trial procedure is adopted so as to reduce the times of trial and enhance
judicial efficiency.

c) Public Hearing
The court shall hold public hearings for the cases filed in the court and shall investigate the
facts and the authenticity of the evidence provided by the parties.141 Further, judges shall
organize and coordinate the debates.

d) Decision Making by the Collegia! Panel


After a hearing, the collegia! panel can make court decision right away or in many cases they

the trial procedure under this circumstances. It must be stressed that the pre-trial procedure helps to reduce times of opening
of procedure and save time in disposition.
139
The assessment of pre-trial was made by the Federal Rules Consultant Committee during the amendment meeting in
1983.
140
Wright, J. Skelly, The Pre-trial Conference in American Court Systems, Readings in Judicial Process and Behavior,
Sheldon Goldman and Austin Sarat, 1978, p. 120.
141
Art. 124 & 125 of Civil Procedure Code (1991).
44 Chapter 2 Legal System and Civil Process in China

will hold an internal a deliberation and make a decision on the case after the hearing. In case
of difficulties in fact-finding and application of law due to the complication of the cases, the
cases will be submitted to the Trial Committee for further discussion.

e) Settlement
A case is seen as settled when a decision is made by the court and the writ is delivered to the
parties. In practice, due to geographical location, it takes time to post the writ to the parties
where as modes of transportation is not convenient in China. Time taken to deliver a writ is
also considered as one of the main factors of court delay.

IV. The Current Structure of the Court System

1. Two-tier Jurisdiction

Most of the civil law countries adopt a three-tier jurisdiction; however, in the Chinese
jurisdiction it is based on a two-tier system under its 4 judicial hierarchies. It is considered
that a two-tier system is much suitable to China in consideration of its social and economic
background, and its territory with a vast rural area where population is large and
communication facilities are backward. More hierarchies involved in the jurisdiction may
therefore cause longer a duration of the court process and instability of the legal relationship.
Two-tier jurisdiction has its advantage in respect to reducing litigation cost and court delay.142
In the two-tier jurisdiction system, if the parties does not agree with the court decision made
by the trial court (the court of first instance), he can appeal and file the case further to a
higher court (appellate court) for final jurisdiction, the judgment made by the appellate court
will be final.143 There is no separation of common courts and administration courts, nor
criminal courts and civil courts in China.144 In general, there are 4 tribunals in each court,
namely the civil tribunal,145 criminal tribunal, economic tribunal146 and administration
tribunal, and normally two panels are established under the civil, economic and criminal
142
Cai, Hong and Li, Han Chang, Civil Procedure Code (Text BookX China Judiciary Publication, 1999, p. 68.
143
The two-tier jurisdiction is the basic jurisdiction system in China. Exceptions are those cases with special procedure,
supervision procedure, public notification procedure and bankruptcy procedure, as well as the trial cases filed in the Supreme
People's Court.
144
In contrast, administrative courts are set up in the court system in Germany and other EU countries.
143
The civil tribunal mainly deals with cases related to personal injury, tort, accidents etc.
146
The economic tribunal deals with cases related to property, contract disputes, economic claims etc.
Chapter 2 Legal System and Civil Process in China 45

tribunals respectively.147 Chart 2.1 illustrates the structure of the court system in China

Chart 2.1 Civil Court System in China

Civil Court System in china

i
the Supreme People's Court
148

I
the High People's Court149

I
the Intermediate People's Court

I
I I J 1
Civil Tribunal Economic Tribunal Administration Tribunal Criminal Tribunal

Tribunal I Tribunal II

In a reform plan approved by the state on 08.08.2000, the economic tribunal will be integrated into the civil tribunal and
there will be 4 divisions under the civil tribunal in the Supreme People's Court the first will be for family disputes, personal
rights, and real estate dispute etc.; the second will be for contractual disputes, and tort cases; the third will be for copyright,
trademark, patent, technical contracts which are related to property right, the forth will deal with maritime issues. Under
such a reform scheme, the division of work in judgment is seen as clearer and more scientific, see: Reform Plan for
Organization in the Supreme People's Court, 2000.
148
The Supreme People's Court of China was established under the People's Court Organization Act, 1954. It is responsible
for judicial interpretation and enjoys wide appellate jurisdiction in constitutional, civil, administration, and criminal cases.
Since the beginning of economic reform, the Supreme People's Court is also responsible for the interpretation of laws.
Further, the rulings of the Supreme People's Court and its legal interpretation of laws are binding on all the courts in the
country.
149
The High People's Court of China is the highest hierarchy of jurisdiction in each province, or the municipality city which
is under direct administration by the Central Government (Beijing, Shanghai, Tianjin and Chongqing). There are 32 High
People's Courts in total, among which 28 are set up in provinces and 4 in the cities of Beijing, Shanghai, Tianjin and
Chongqing. The High People's Court deals with complicated cases within its territorial jurisdiction. The judgments of the
High Courts can be reviewed only when the conditions for retrial or appeal prescribed in the regulations are satisfied.
150
The Intermediate People's Court is set up in every city in China for the trial of original cases and appeal cases within its
jurisdiction. The Intermediate People's Courts and the District Courts in China solve most of the cases, accounting for more
than 80% of the total filings.
131
The District Court is in charge of all disputes within its territory of jurisdiction; normally it is responsible for the cases in
the each district of the city.
As to tiie cases or disputes in the counties or rural area, in practice, the local village governments will first deal with the
disputes among the local people, normally by mediation or arbitration by the local officers. In case of bigger cases or cases
which cannot be resolved by the village governments, then the parties may go to the County Court for court remedy. In
China, the county is the basic unit of administration; the County Courts have the same functions as the District Court in the
city.
46 Chapter 2 Legal System and Civil Process in China

The Chinese Civil Procedure Code also stresses on the importance of mediation by the courts,
as stipulated in Art. 9 of the Civil Procedure Code, the court shall first mediate the parties to
reach agreement; only when mediation does not work, the court then shall make judgment
duly. This rule is strongly influenced by the Chinese traditional culture in which lawsuits are
not encouraged and disputes shall be resolved through a peaceful manner.
Currently there are about 3406 courts in China with approximately 14,000 tribunals in total.
Table 2.2 gives a brief illustration of the jurisdiction of the four levels of courts and the total
number of courts.

Table 2.2 Jurisdiction of the Courts and the Number of Courts


The Supreme People's Court (jurisdiction of whole country) 1

High People's Court (corresponding provincial jurisdiction) 33

Intermediate People's Court (corresponding city jurisdiction) 365

Court in the District/County level (corresponding County/District level) 3007

In total: 3406
Source: Compiled from China Law Year Books and relevant reports. The number of courts is more or less fixed but may
slightly increase due to the increase of administrative regions.

2. Division of Work

In civil cases, the principle of jurisdiction is based on the nature of the case, complexity of the
case, social influence, convenience for litigation and convenience for jurisdiction of the
courts. Most of the civil cases are under the jurisdiction of the District Courts and County
Courts. As the courts of first instance, District Courts and County Courts dispose of more
than 80% of the total civil cases filed in the courts in China.152 The rest of the cases filed and
disposed by the Intermediate People's Courts and High People's Courts mainly are
complicated in nature or involve a high 'dispute value'.
With respect to pecuniary cases, they are accepted by the courts according to the "dispute
value". Normally, the higher the dispute value of the case, the higher hierarchy of court that
will be assigned for jurisdiction of the case.

152
Estimation according to the statistics of filings and dispositions as per China Law Year Book, 1988 - 2000.
Chapter 2 Legal System and Civil Process in China 47

a) The Supreme People's Court


The Supreme People's Court is mainly responsible for review and jurisdiction of complicated
cases and appeal cases; it is also responsible for the supervision of the lower courts,
interpretation of laws and rules, as well as for judicial administration and reform etc.
Although the Supreme People's Court can also dispose of original cases, so far there have
been no original filings in the Supreme People's Court. The Supreme People's Court mainly
deals with appeal cases and complaints regarding judgment made by the courts of lower
hierarchy.

b) The High People's Court


The High People's Court is mainly responsible for appellate jurisdiction and supervision of
the lower courts within its province.
The cases in civil and economic issues filed in the High People's Courts of first instance shall
meet the requirement of the "dispute value" in accordance with the regulations of the
Supreme People's Court, as indicated in Table 2.3 and Table 2.4.153 The number of filings is
also limited in consideration of its burden.
For civil cases concerning property disputes and foreign countries (incl. the regions of Hong
Kong, Macao & Taiwan), the High People's Courts will accept the filing for trial according to
the dispute value of the cases, however, the level of "dispute value" varies in different
provinces and cities.

See the Notification of the Supreme People's Court with respect to the original trial cases, 1999.
48 Chapter 2 Legal System and Civil Process in China

Table 2. 3 "Dispute Value" of the Trial Cases with respect to Property Disputes154 filed
in High People's Court
Beijing, Fujian, Jiangsu, Shangdong, Anhui, Other Provinces
Shanghai, Zhejiang, Hunan, Guangxi, Henan,
Guangdong Hainan, Sichuan, Chongqing, Tianjin,
Hubei Hebei, LiaoNin, Heilongjiang
1. Value of Property >100 >50 >30 Million >10 Million
Dispute Million Million

2. Value of cases >80 Million >30 >20 Million >8 Million


concerning with Million
foreign countries
(incl. HK, Macao &
Taiwan)
Number of total Max. 10 Max. 8 Max. 5 cases Max. 5 cases
cases accepted by cases cases
each High People's
Court
Source: the Supreme People's Court's regulation on trial case filed in High Court and minimum of the dispute value. This
regulation is effective since 1999.

For cases in economic issues,155 the regulation is slightly different from the property issues
in respect to the provinces listed, and there is no restriction of the number of filings.

Table 2. 4 "Dispute Value" of the Trial Cases with respect to Economic Disputes filed in
High People's Court
Beijing, Shangdong, Jiangsu, Fujian, Tianjin, Hubei, Other Provinces
Shanghai, Liaonin, Zhejiang Hunan, henna, Jilin,
Guandong Heilongjiang, Guangxi,
Hainan Chongqing, Anhui,
Jiangxi, Sichuan, Shanxi,
Hebei, Shangxi
1. Value of Property >100 >50 Million >30 Million >10 Million
Dispute Million
2. Value of cases >80 >30 Million >20 Million >8 Million
concerning with Million
foreign countries
(incl. HK, Macao &
Taiwan,)
Source: the Supreme People's Court's regulation on trial case filed in High Court and minimum of the dispute value. This
regulation is valid since 1999.

Cases withrespectto property issues refer to those cases heritage, family property and insurance etc.
Case with respect to economic issuesreferto those cases mainly relating to contractual disputes.
Chapter 2 Legal System and Civil Process in China 49

c) The Intermediate People's Court


The Intermediate People's Court has either jurisdiction on trial cases and appellate
jurisdiction. With respect to the original trial cases filed directly with the Intermediate
People's Court, the level of "dispute value" is different in each province, the respective High
People's Court has the right to regulate the dispute value of the original cases filing in the
Intermediate People's Court in different cities according to the economic development in the
province. For example, Table 2.5 shows the "dispute value" of cases filed in the Intermediate
People's Court in Xiamen City shall normally be bigger than 2 million Yuan for civil disputes
and 3 million Yuan for economic disputes.

Table 2. 5 "Dispute Value" of Trial Cases filed in the Intermediate People's Court in
Xiamen City
Civil Cases Economic Cases

"Dispute value" > 2 million Yuan > 3 million Yuan

d) The District People's Court/County Court


Most of the cases concerning family issues like marriage, divorce and cases with small value
are filed directly in the district courts or county courts, the "dispute value" varies in different
cities; take the district court in Xiamen City as an example, the dispute value for civil cases is
up to 2 million Yuan, and the dispute value for economic cases is up to 3 million Yuan.

Table 2. 6 "Dispute Value" of Trial Cases filed in the District People's Court in Xiamen
City
Civil Case Economic Case

"Dispute value" Up to 2 million Yuan Up to 3 million Yuan

In accordance with the Some Opinions on the Application of the Civil Procedure Code, the
jurisdiction of cases concerning foreign country, patent, maritime affairs and others are

156
'Some Opinions on the Application of Civil Procedure Code 'is a judicial interpretation issued in 1992 for the purpose of
better application of Civil Procedure Code.
50 Chapter 2 Legal System and Civil Process in China

explained in Articles 1-3 of the Opinion on Application of the Civil Procedure and these cases
shall be subject to the jurisdiction of the Intermediate Courts.

5. The Trial and Appeal Procedure

a) The Collegia! Panel and the Trial Committee


According to the People's Court Organization Act, a collegial panel or a single judge shall be
formed or appointed for the judgment.157 In practice a single judge is appointed for judgment
of simple cases during the first instance in District/County courts and the collegial panel is
applicable for complicated cases in District/County courts. For courts of a higher level,
normally a collegial panel shall be appointed for the judgment in consideration of the higher
dispute value and complexity of the cases. The collegial panel normally consists of 3 judges
for judgment.158
In accordance with People's Court Organization Act, the Trial Committee is established in the
court as collective leadership in supervising judgment work; the Trial Committee shall
discuss complicated cases or cases with a large dispute value.159 The Trial Committee shall
review the cases, in cases where the president of the court finds mistakes contained in
fact-finding and application of law and submits the case to the Trial Committee for discussion
of whether retrial is necessary.160 The role of Trial Committee is the most controversial issue
among the law professionals, since it enjoys a great deal of discretion over case decisions and
often interferes with the court decisions made by the judges.

b) The Procedure: Filing and Disposition


With respect to filing, the court shall inform the litigant within 7 days whether the case
submitted fulfills the conditions of the filing or is not according to the regulation on filing.
After filing and acceptance, the court will decide whether a single judge or a collective
tribunal shall be assigned for jurisdiction according to the complexity of the case. In case the
157
Art. 10 of Court Organization Act.
158
Art. 11 of Court Organization Act, Art. 147 of Criminal Procedure Act.
159
Art. 11 of Court Organization Act.
160
Art. 14 of Court Organization Act, Art 177 of Civil Procedure Code; Art. 63 of Administration Procedure Code. In
accordance with these articles, the judgment made by the collegial panel or single judge is effective unless it contains
mistake or it is requested by the president of the court to review the judgment otherwise the Trial Committee has no right to
interfere into the case. In reality this is not the case, according to the empirical study made by Prof. Su Li, in his
"Investigation of the Trial Committee in the Local Courts", the Trial Committee very often intervenes the cases even without
the request of the president of the court if it regards that the cases contain mistakes in fact-finding or application of law.
Chapter 2 Legal System and Civil Process in China 51

litigant or defendant disagrees with the judgment made by the court of the first instance, they
can appeal to a higher court. In case of appeal, the lower court must transfer the documents to
the higher court within 7 days from the day the appeal is made. In the second trial at the
appellate court, the trial is final. However, each party still has the constitutional right to apply
for retrial under the supervision procedure. In case of application for retrial, the Trial
Committee of the court will review the case and decide whether the case is necessary for
retrial.
In brief, the filing and disposition can be put in a simple manner with 7 phases described as
follows:

1. Filing and pre-payment of litigation fee by the litigant


2. Time for meeting appointed by the judges
3. Pretrial preparation: evidence-collection, witness, expert view and inspection etc.
4. Hearing
5. Internal discussion made by the Collegial Panel
6. If no consent, further hearing and discussion would be repeated.
7. Judgment made after consent of the judges

Phase 3, 4 and 5 are variable since pretrial normally consumes a lot of time, especially in
respect of collection of evidences; a hearing may be repeated in case new evidence becomes
available; the proceedings will be lengthy when the Trial Committee takes part in discussion
of cases. In case of retrial procedure in the same court, phase 3,4 and 5 have to be repeated.

4. Retrial Procedure under Judicial Supervision

According to Civil Procedure Code, the courts, the procuratorates and the parties can start the
supervision procedure or retrial procedure; the parties can apply for retrial if the court
orders/decrees are found to contain material mistakes in fact-finding and application of the
law. In general, the supervision procedure under the current Chinese legal system includes:
- self supervision by the courts (proposal by the president of the court to have a retrial);161
- retrial procedure initiated by the parties;162
- retrial procedure in case of challenges of court orders/decisions by the procuratorates..163

Art. 177 of Civil Procedure Code.


Art. 179 of Civil Procedure Code.
Art. 185 of Civil Procedure Code.
52 Chapter 2 Legal System and Civil Process in China

From legal point of view, the effective court orders/decisions are compulsory to the parties
and shall not be changed for the sake of the stability of the law. The court orders/decisions
made by the courts are final and binding on all parties. As soon as the court orders/decisions
are made by the appellate courts, the finality of law shall be assured and court
orders/decisions shall be enforced with no delay.
However, the finality of law does not mean that the court orders/decrees cannot be challenged.
In the judiciary, judges may make mistakes in fact-finding and apply the law improperly due
to negligence or lack of professional knowledge and practice experience or due to an
imperfect supervision mechanism and the influence of local protections, and corruptions etc.
Mistakes and miscarriage of justice in jurisdiction thus deviate from the spirit of rule by the
law Therefore, the supervision procedure is to correct the mistakes or avoid miscarriage of
justice contained in the court orders/decrees so as to provide further substantive and
procedural remedy to the parties by an ex-post supervision.164

a) Retrial Procedure
Retrial procedure can be started by the parties according to Art. 179 of Civil Procedure Code,
or by the courts according to Art. 177,184 of Civil Procedure Code; further, retrial procedure
can be started when the procuratorates challenge the court orders/decisions according to Art.
185 or Civil Procedure Code. The retrial can be either undertaken by the court, which
generates the original court order/decision or by a higher court.
Judicial supervision is seen as a continuation of trial, but it differs from the regular order of
the first instance and appeal procedure: first, according to the civil procedure in China,
judicial supervision is considered as a remedy to 2-tier jurisdiction in which the court
decision made by the appellate courts will be final. The application of retrial procedure can
only be allowed when new evidences are found and it is sufficient to overturn the original
court decisions, or when mistakes are found in fact-finding and application of law, or when
164
In China, judicial supervision is a broad term, which further includes the supervision of the ruling party in the courts, and
supervision from the state organs, social organizations, other existing parties in China, press, as well as the public who are
eligible to supervise the judicial activities of the courts based on the constitutional right. This concept of supervision in
judiciary is however different from the judicial supervision mechanism in legal procedure. Such broad term of supervision of
judiciary by the state organs, social groups and individuals is not defined in procedural law and is regarded as an external
supervision. For example, the People's Congress may require the courts to reopen the legal procedure if mistakes are found
in the court orders/decrees. Whereas the judicial supervision in the form of retrial procedure is mainly initiated by the parties
or by the courts and the procuratorates. Whether the supervision procedure (retrial procedure) can be realized depends on the
examination of the courts. From this point of view, judicial supervision mechanism is an internal supervision by the courts.
Chapter 2 Legal System and Civil Process in China 53

the procedure is violated and miscarriage of justice might happen. Second, the filing
procedure in the first instance and during the appeal phase is initiated by the parties who have
the substantive right in the case, whereas retrial procedure can not only be initiated by the
parties, but also by the court itself and the procuratorate under judicial supervision procedure.
Third, retrial procedure is a remedy of 2-tier jurisdiction under the current legal framework in
China to ensure substantive justice. Retrial procedure can only be approved after the court
affirms that the original court decision contains mistakes and therefore it is necessary to
correct such mistakes so as to realize substantive justice. In retrial procedure, a new collegial
panel with new members must be formed.165
No doubt, in retrial, procedural rights of the parties shall be treated as the same as the
procedure in trial and appeal. In practice, such rights are not fully respected, especially with
regard to public hearing. Judges often discuss the cases by reading the filing documents rather
than spending time to have hearings. According to Art. 125 of Civil Procedure Code: "Cases
under the jurisdiction of the People's Court shall have a public hearing, except those special
cases defined by the law". Justice can only be guaranteed and corruption can be effectively
deterred and prevented only with a public hearing, it is no exception with a retrial. There are
almost no public hearings in retrial and it normally proceeds with inquiries in writing and
some investigations. Such practice causes many problems166 since most of the retrial cases
are based on new findings in evidence, which could overturn the original court decisions.
Only with public hearing and the inquiry by the judges with the presence of all parties, the
objectivity, legitimacy and relevancy of the evidence can be justified; otherwise, it is difficult
to guarantee justice in a retrial.

b) The Problem concerning Finality of Law and Duration


As per Art. 179 of Civil Procedure Code, the court shall retry cases if the parties have new
evidences, which are sufficient to overturn the original judgment, or the main evidences are
insufficient to support the original court decision. Normally it is very difficult to collect all
the evidences relating to the fact, and judgment is always made when the evidence from the

165
In the first instance, one judge can be selected to make the trial.
166
Reference as per Guan, Pi Liang, "Getting out of Wrong Direction of Judicial Supervision", in: Bejing Judiciary Press,
on 09.02.1996.
54 Chapter 2 Legal System and Civil Process in China

parties is able to prove the fact reasonably. The stability of the court order and finality of the

law would be very difficult to be maintained if retrial procedure is allowed whenever there is

new evidence available.167

It would contradict the finality and speediness of the law if the original court orders/decrees

were frequently subject to change due to new evidence presented. Unlike the civil law, it is

much more reasonable for penalty law to apply retrial procedure when new evidences are

available, since the evidences are collected by the court itself, but in civil cases, the evidences

are mainly collected and provided by the parties and therefore the parties should present the

evidences to the court as quickly as possible. The parties shall be liable for any delay in

providing the evidences. If retrial procedure is allowed whenever there are new evidences

available, then it will be difficult to regulate the time limit for evidences; furthermore, the

parties may make use of such procedure to delay litigation. In practice, the parties may keep

some of the important evidences in the first instance and present it in the appeal, in a

consequence, the appellate court may change the original court order/decree made by the

court of the first instance or send the case back to the court of the first instance for re-opening

of the procedure. Such strategic behavior impedes the impartial jurisdiction by the trial court

and damages the interest of the other party. In some cases, the parties even keep some of the

evidences waiting for retrial procedure. It must be pointed out that it is waste of the time and

the energy of the judges and it is contrary to judicial efficiency without restriction of evidence.

The current reform on evidence strengthens the obligation of the parties to collect and

provide evidence to the court within the time limit.168

5. The Functioning of2-tier Jurisdiction versus 3~tier Jurisdiction

The purpose of setting up a 2-tier jurisdiction system instead of 3-tier jurisdiction system in

China is to facilitate the jurisdiction of the appellate court within its territorial limit and the

convenience of filing for the parties; furthermore, a 2-tier jurisdiction is suitable for the

157
It is argued that the instability of law is not very much related to the state of law, but the evidence which is related to the
fact. See Adams, Michael, Okonimische Analyse des Zivilprozesses, KOnigstein/Ts., 1981, p. 80.
168
The Supreme People's Court Some Regulations on Civil Litigation Evidence, effective on 01.04.2002. Art. 33 stipulates
that the parties may agree upon the time to provide evidence to the court, otherwise the court shall appoint the time, which
shall be more than 30 days.
Chapter 2 Legal System and Civil Process in China 55

geographical situation of China which is vast in terrain and population. Due to the high
ratio of retrial cases, the 2-tier jurisdiction does not reach the goal of providing speedy and
inexpensive redress; besides, 2-tier jurisdiction has some obvious defects: first, since cases
must be judged within a certain territory of jurisdiction, local protection is always involved in
the jurisdiction; further, due to the social connections and personal relationship, it is difficult
for the judges to ignore the social networks around them and they are likely to be
influenced.170 Out of this consideration, many scholars proposed that the Supreme People's
Court shall act as an appellate court when the cases involve parties from different regions so
as to avoid local influence. Second, 2-tier jurisdiction leads to low quality in judgment as
most of the civil cases are filed in the local courts (trial court and appellate court) and in these
lower courts judges are more likely to have a different version of understanding in the
application of law, consequently the uniform rules of law would be affected. Third, since
there is no uniform regulation on time limit of the supervision procedure, it often gives an
excuse for court delay; moreover, private autonomy in civil law is affected since retrial can be
initiated by the courts and the procuratorates. In consideration of these factors, it is argued
that a 3-tier jurisdiction would be more reasonable to replace the supervision procedure.171
But in a 3-tier jurisdiction, millions of civil cases may be brought to the High Courts or the
Supreme Court, the civil procedure would be lengthy and the duration of litigation would be
too long. Besides, the parties will have to pay more litigation costs, time and energy and the
courts have to invest in more human capital and facilities to finalize the procedure of a 3-tier
jurisdiction. From the current limited judicial resources in China, this proposal is still
considered as unrealistic and is not suitable to the situation in China.172

V. The Problems Facing the Chinese Judicial System and its Restructuring

Judiciary, together with the branch of executive and legislative, forms the corner stone of
state power. Judiciary shall be independent from other branches. Due to the influences of
political, economic system and judicial culture, tradition, etc., judiciary plays different rolls in
169
Chen, Gui Ming, Litigation Justice and Procedural Guarantee, China Judiciary Publication, 1996, p. 113.
170
Chen, Gui Ming, Litigation Justice and Procedural Guarantee, China Judiciary Publication, 1996, p. 123.
171
Fu, Yu Lin, The Principle of Structuring the Judicial Hierarchy: a comparative analysis, in: China Social Science, (4)
2002, pp.87, 88, 89.
172
Liu, Tong Hai and Zhu, Xiao Long, Is the Court Fee Reasonable? in: China Lawyer (12) 2002, p. 22.
56 Chapter 2 Legal System and Civil Process in China

different state power structures. Consequently, the understanding and the goal of the judiciary

are also different. As a socialist state, the Chinese judiciary is strongly affected by the highly

centralized planned political and economic system. In the 1960's, the judiciary was simply

considered by the state as the tool for the ruling and even was viewed as an obstacle to the

spontaneity of social processes. The apparatus of justice broke down completely and law

professions were forbidden at that time. The legal system is under a new era of development

since the renewal of belief in the value of legal order in the 1980's. In the past 20 years, the

reform and the open policy is mainly undertaken in the area of economics, whereas little in

the political system and judicial system. It is still difficult for the Judiciary to be independent

from the state administration, and localism in the judiciary becomes an obstacle of judicial

and economic development. The lack of human capital affects the pace of judicial reform and

in the mean time often has to do with a low quality of judgment. The difficulty in law

enforcement has been a bottleneck of the judiciary in China. The general public is dissatisfied

with the judiciary with respect to the long duration of court cases, high cost in litigation and

miscarriage of justice. It is therefore no surprise to see that the reform in the judiciary in the

recent years has attracted quick social attention and reaction. Further, it must be addressed

that the problem of court delay is not an independent phenomenon; it is rather a complex

outcome due to the problems existing in the judiciary.

1. Judicial Independence: A Dilemma

Judicial independence is regarded as the heart of the judiciary. However, under the current

social and economic system, the local courts have little budget autonomy and little discretion

in personnel management. In the judiciary, the civil procedure is often violated by local

interference; judges are unable to make decision before they are instructed to do so 173 or they

may have a bias to judge in favor of local firms.

In an empirical study on "Judicial Reform" through questionnaires assigned to 288 judges,

most of the judges admit that in China there is no judicial independence and none of them

The administration pattern of the court system in China requires judges to report the cases to the president or the Trial
Committee of the court. Final decisions are normally made with the consents from judges of higher positions, for example,
the president of the court or the Trial Committee, but not presiding judge himself.
Chapter 2 Legal System and Civil Process in China 57

agreed that independent jurisdiction in accordance with the constitutional law has been
completely realized. 164 judges (56.9%) viewed that it has been 'to some degree' realized; 98
judges held the view that 'basically' it hasn't been realized, and 26 judges held the view that
it was 'not' realized, these two parts accounted for 43.1%.174 This indicates that judicial
independence is only written on paper, and the principle of judicial independence is not
respected due to constraints from the political system, judicial administration, social and
economic influences and other factors.

a) Budget
It is a basic feature in the modern judicial system that jurisdiction is exercised by the judicial
organs independently. In China, judicial independence as a basic principle is written in the
Constitution and in relevant laws. According to Article 126 of the Constitution, which was
approved by the National People's Congress in December of 1982, "The courts excise its
jurisdiction independently in accordance with the laws the regulations, and it shall not be
interfered by the administration and any individual".175 But in reality, the principle is very
difficult to respect. According to a financial arrangement, the budget for the salary of the
personnel and the budget for the operation of the courts is arranged by the local governments
(for more details see the survey in Chapter 4) and subject to the examination and approval of
the local National People's Congress. The material foundation of judicial independence does
not exist when the "economic lifeline" of the judiciary is under the control of local
governments and the administrations. As a result, it is difficult to realize the independence of
jurisdiction when the courts and procuralorates in all levels and cities have to rely on the
budget granted by the local governments and administrations. Individually, as a judge or a
procurator, it is a dilemma for him/her in jurisdiction since on the one hand it is an honor to
be a judge who brings justice to the society, but on the other hand it is difficult for him to
keep the balance in the procedure when the career and income resource are under strong
influence of the local governments and administrations. Further, as a cultural tradition, the

174
Jiang, Hui Ling, "The conditions and ways to realize judicial independence in China", in People's Judiciary (3) 1998, p.
16.
Whereas in Latin America, more than 55% of judges interviewed in Argentina, Chile, Ecuador, and Venezuela said that lack
of independence was one of the main barriers to justice. Compare: Edgardo Buscaglia Jr., Maria Dakolias, and William
Ratlifif, Judicial Reform in Latin America: A Framework for National Development, Stanford University 1995, p. 12.
175
Art. 126 of the Constitution Law of China.
58 Chapter 2 Legal System and Civil Process in China

parties usually make an effort to make use of their "relationships" in the government and
administration so as to influence the outcomes of lawsuits rather than emphasize proper
application of law. Such a tradition has resulted in adverse effect on judicial independence.176

b) Localism in the Judiciary


The judiciary as a branch of state power shall be highly centralized rather than decentralized.
In this consideration, jurisdiction in all level of courts shall be part of the state power and
shall not be divided in different regions. In reality, one of the most severe problems facing the
judiciary in China is the local protectionism in the jurisdiction and it is considered as one of
the main causes of the miscarriage of justice. Localism can be in various forms in the civil
process, e.g. the courts may have pre-selection of filings and territory of jurisdiction, or may
settle disputes simply in the interest of the local parties, or may have bias in the enforcement
of court orders/decisions. In practice, it is very often the situation that many local courts do
not accept the filings177 or simply delay the filings if the claims are lodged by parties from
other regions. The judgment made is always prejudiced against the parties from other regions.
Court orders/decisions would be very difficult to enforce when the parties from other places
win the cases.178 In some cases, judges in local courts even distort or hide facts for the
benefit of the local parties.179 As a consequence, parties are always frustrated about going to
a court, which is not situated in the same region of jurisdiction due to the difficulties in
winning or the enforcement of the law in case of winning. The risk of having a bigger loss is
likely to incur in case of filing outside of local courts since at least the litigation costs and
traveling cost will be saved without filing. Localism has severely affected the public's
confidence in resolving disputes by recourse through the courts and damages the credibility
of the judicial system when jurisdiction becomes a tradable object.
Localism in the judiciary is causing harm to the sound development of a market economy in
which a stable legal system (Rechtssicherheit) and a relatively predictable outcome in civil

176
As known, it is very common and frequent that me parties involved will first try to find "relation" in the courts through
their friends, acquaints or relatives. In many cases local government officials can influence the outcome of the case by a
phone call, writing note or instruction.
This happens in the case when several courts have the right ofjurisdiction over the case.
178
So far there is no data available in this respect However, it is a general view among the parties and the general public
that the risk of losing the case will be high in case of filing at a court which is out of one's own territory of jurisdiction.
179
Zhan, Shun Chu, President of High People's Court of Hunan Province, "Correcting local protectionism to guarantee the
uniform judiciary and the respect of jurisdiction", in: Jurisprudence Comments, l rt ed., 1991.
Chapter 2 Legal System and Civil Process in China 59

litigation shall be guaranteed so as to encourage domestic and international investment. To

deter or eliminate the localism in jurisdiction, reform shall be undertaken to the current

judicial administration. For example, it is proposed that the cases shall be under jurisdiction

of a higher judicial hierarchy and appeal cases shall be submitted to the Supreme People's

Court for jurisdiction when the parties come from different regions as a way to avoid local

protectionism.180 But it might cause adverse effects since the Supreme People's Court will

not be able to burden such workload within its limited capability in respect of availability of

judges and budget; further the parties will have to bear additional travel costs across regions.

Such a suggestion is not appropriate since the Supreme People's mainly focuses on

interpretation of law and supervision of the judiciary, but not on jurisdiction of cases.181

Despite formal structural independence "guaranteed" by the national constitution, the

organization of the courts, personnel, and budget are administered by the local governments,

it is inevitable that the interest of the local courts is intertwined with the local interest, thus, it

is difficult to realize justice and eliminate localism in the judiciary unless reform is made to

the current judicial administration with respect to organization of the courts, personnel and

budget. To reach the goal, the state shall subsidize the judiciary and reform the current budget

scheme. A minimum budget for the courts in all levels shall be guaranteed. Personnel and

budget autonomy are essential elements in the reform since they are basic principles and

preconditions for judicial independence.182

Z Lack of Human Capital

In most of the countries, judges and procurators are well trained by legal education and shall

have rich practical experiences; they are normally selected from law school or from

experienced lawyers who have professional education and practical experience. On the

contrary, the standard for judges in China is still far from that of other countries. The

admission of judges is not strict.183 In the 1980's and 1990's, large number184 of demobilized

180
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 422.
181
Ditto.
182
There are many reform discussions in Chinese literature, which cannot be presented in details in this thesis. The main
point is about how the state shall assure budget autonomy and personnel autonomy. In respect of budget autonomy, the main
suggestion is that the state shall guarantee a minimum budget, whereas the gap shall be then covered by the local fiscal
budget.
183
According to Judge Act and Procurator Act, to become a judge or procurator, one shall have a law degree and one year's
60 Chapter 2 Legal System and Civil Process in China

army officials entered into the courts. Legal training was simple, normally they received a

'certificate', which was deemed as university degree after 3 or 4 months of training and were

put into positions.185 Unlike the 2 years' of training for law students in Germany or other

Western countries, law students in China stay about 3 months in the courts before graduation

from universities. Most of the judges have little practical experiences before admission or

were admitted as judges shortly after their 4 year university education. It is simply not

enough training/education for them to make judgments when they have little on-the-job

training or are just beginning their occupation with little practical experiences.

First, one can admittedly say that that the average quality of Chinese judges is very low.

According to a report, among the 270,000 calibres186 in the court system in 1997, 5.6% of

the judges were graduates (bachelor degree), and 0.25% of the judges are post-graduates

(master degree); among the 180,000 calibres in the procuratorate system, 4% were graduates,

and 0.15% the judges were post graduates.187 With unqualified calibres and judges in

judiciary, the law cannot be correctly interpreted and the right of the parties cannot be

effectively protected. Consequently, the quality of the judgment will not be high, especially

when the judges in the lower courts, which deal more than 80% of the civil cases, do not have

enough professional knowledge to cope with complicated legal problems; it is no surprise

that the rate of appeal is very high in China 188

Secondly, as a result of low level of human capital, the average disposition is also very low.

As shown in Table 2.7, in 1989, the number of judges amounted to about 120,000 189 and

3,182,192 cases were settled in this year, with an average of 26.5 cases settled by each; in

work experience or a high school degree with knowledge in law and 2 years' work experience. Judges are mainly divided
into 4 types according to the positions, namely the president and vice president of the court, the presiding and vice presiding
judge of the tribunal, judges, and assistant judges.
184
According to interviews and personal observation, the demobilized (retired) army official may have a share of 20 - 30%
of the personnel in the courts in the 1980s. The rate decreases in the 1990s when more and more university graduates enter
into the courts.
185
It must be admitted that in the 1980s and at the beginning of 1990s, law education was just renewed and there were few
graduates. The officials from the army were considered to have higher moral standard and more disciplined. Furthermore, the
admission to the courts serves as a job assignment.
186
According to the Chinese Court Organization Act and Judge Act enacted in February 199S, the qualification of judge is
very simple and those who do not have legal education and training can be also admitted as judges.
187
Zhang, Wei Li, China Needs Human Capital for Judiciary", in: Judiciary Daily, on 03.10.1997.
As an endeavor to reform the judicial system and improve human capital Judicial Examination was initiated in 2002 to
improve the quality of judges. Passing the exam is a precondition for law professions. Also in: Gan,Wen, Some basic
questions with respect to justice, in: China Jurisprudence, 5th edition 1999.
188
Source: compiled from China Law Year Book, 1988 -2000.
189
Source: compiled from China Law Year Book, 1988 - 2000.
Chapter 2 Legal System and Civil Process in China 61

1998, there were more than 170,000 judges in all courts in China, and 5,864,274 cases
were settled in the same year, with an average of 34.5 cases settled by each judge in the year;
in 2002 the number had increased to approximately 210,000,191 and approximately 6,850,000
cases were settled in this year, with an average disposition of 32.6 cases disposed by each
judges. Table 2.7 illustrates the increase of judges in different time and the average
dispositions

Table 2.7. Number of Judges in different Time and the Average Dispositions
Year Number of judges Total Dispositions (per year) Average Disposition (per year)

1989 120,000 (app.) 3,182,192 cases 26.5 cases / per judge

1998 170,000 (app.) 5,864,274 cases 34.5 cases / per judge

2002 210,000 (app.) 6,850,000 cases 32.6 cases / per judge

Sources: Compiled from China Law Year Book, 1988, 1998 and Legal Daily 09.03.2002.

Compared with the average cases settled by judges in other countries/regions, the average
disposition by Chinese judges is very low. It may attribute to the procedure and court system
and has much to do with the improper proportion of the judges and assistant personnel. For
example, in 1998, the number of judges is 170,000, but the number of personnel in the courts
amounted to 280,000, namely, judges share 61% of the personnel of the courts. In contrast,
the number of judges in the United States in 1984 accounts for 5.9% of the court employees
in total; in Taiwan, the proportion of judges in the total court personnel is 15.6%.192 Though
the proportion of judges is big, the quality is not satisfied. The aim of the current reform shall
consider a proper proportion of the number of judges to assistants and replace those
unqualified personnel with well-trained law students and law professionals so as to improve
the human capital of the courts.

190
See China Law Year Book 1998, pp. 1238, 1241-1243; thefigureof judges does not include the clerks, court police and
other personnel who are not engaged in the judgment
191
See report made by the President of the Supreme People's Court, in: Legal Daily 09.03.2002.
192
Su, Yong Qin, Reform of Judicial Reform, Yue Dan Publication/Taiwan, 1998, p. 333.
62 Chapter 2 Legal System and Civil Process in China
193
S. Administrative Pattern in Judiciary

It is commonly regarded that the judiciary is heavily influenced by the bureaucratic

administration of the government.

First, in China courts are much more localized and decentralized instead of in a centralized

and vertical structure. Regarding the relationship between the courts and the local

government, despite formal constitutional guarantee, the courts are seen as a department of

the local government and are under the administration of local governments in terms of

personnel and budget.194 The nomination of a president of a court is based on his position in

the government (bureaucratic position) rather than his professional background. The

admission of judges is just as the admission of civil servants in the local governments.195

Such a pattern of administration has a long tradition since the planned economy in which

separation of judiciary and administration of the state did not exist.

Besides the hierarchical positions in the courts, the judicial personnel are ranked according to

the bureaucratic standards of the governments and their corresponding honors and salaries are

in accordance with the positions. The legal knowledge of the judges was simply weighed

according to the bureaucratic rankings.196 The nomination and selection of judges are subject

to the local administration and local congress.

The dependence of the courts on the local administration in respect of budget autonomy,

personnel management and even housing etc. leads to weak control of executive power.

Courts are even unwilling to accept the filings of administrative cases by using excuses or

delaying the disposition, or even ask the litigant to withdraw the cases.197 In adjudication of

administrative cases, the judiciary lacks power and strength. According to the statistics, filing

of administrative cases is comparatively small, for example, administrative cases filed in the

trial courts in 1997 amounted only to 79,527, which is only 5.29% of the economic case or

2.57% of the civil cases.198 The judiciary does not function well in guaranteeing the rule of

193
The 'administration' here refers to the administration of local government rather than judicial administration.
194
Zhang, Wei Ping, Review on Judicial Reform, Vol. 3, China Judiciary Publication, 2001, p. 3. So far mere is no statistics
available to see how many percentage of cases are judged in favor of the administration. The parties often ask for
administration review instead of suing in the courts; even lawsuit is brought against the administration, the influence of the
local administration is obvious under the current relationship.
195
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, pp. 33, 181.
196
Infra Footnote 200.
197
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, pp. 120,121.
198
Compiled fiom China Law Year Book 1998.
Chapter 2 Legal System and Civil Process in China 63

law and controlling the executive power. According to an empirical study, the public lack

confidence in the judicial control over the executive power of the administration and are

doubt the competence of the judiciary in disposing of administrative cases. 26.08% of the

interviewed believed in the judiciary's competence 'completely', 26.68% 'to a certain degree',

32.82% 'lack of confidence', and 14.12% 'does not believe'.199 This indicates that around

half of the people do not trust in the competence of the judiciary in respect of administrative

cases. Furthermore, the judgment of administrative cases is difficult to be enforced.

Secondly, there are too many administrative departments within the courts and the

bureaucratic characteristics are very obvious. According to an investigation made in one

province, there are around 14 departments within the District Courts, 19 in the Intermediate

Courts, and 23 in the High Court. Among 84 court personnel in a District Court, 39 of them

(46.4%) are high rankings officials for administrative matters.200

Thirdly, regarding the jurisdiction and judicial administration within the courts, judges have

to report the decisions to higher-ranking administrative officials (from president of the

collegial panel, vice president and president of the court, and the Trial Committee).

Complicated cases must be submitted to the Trial Committee for further discussion and

approval, the views and decisions of the president and the Trial Committee often dominate

the outcome. Thus the trial and decision are separately executed. The administrative power

dominates the judgment.201 In this long process of reporting and decision-making, court

delay is more likely to occur.

One can distinguish that judicial administration is different from jurisdiction. Judicial

administration shall be mainly enforced by the president of the court in terms of management

of personnel, budget and facilities of the courts; whereas the current judicial administration

extends too much discretion to the president and the Trial Committee of the court in

jurisdiction and often leads to interference. Though the experience, ability of individual judge

may vary from one another, the judgment made by each judge should be equally respected.

Generally speaking, the judicial functions and the composition of personnel in the court

199
Xia, Yong, Towards An Age of Rights,China University of Politics and Law Publication, 1999, p. 62.
200
See Wu, Dong Yu and Hua, Shi, An Investigation and Comment on the Internal Setup and Categorized Personnel
Management of the People's Courts, in: Zhang, Wei Ping, Review on Judicial Reform,
Vol. 4, China Judiciary Publication, pp. 438, 336,447.
201
Ditto.
64 Chapter 2 Legal System and Civil Process in China

system are not established in accordance with the principle of the jurisdiction, but based on

the pattern of governmental administration. The system is the same as a bureaucratic and

centralized governmental department, which results in centralization of power, backward

management, overstaffed organizations, inefficiency, etc. and these become system-illnesses

which cannot be self overcome.202

4. Dim View of Procedural Justice

Unlike the philosophy of "priority of procedure" in Western society, the viewpoint of

procedural justice does not exist in the history of judicial development in China Dim views

to procedural justice and violation of procedure are very common practice.

In judiciary, the rule of law comes together with the procedural justice. The implementation

of law can only be secured and the legal value of justice can only be realized under a justified

procedure. From such a point of view, some procedural elements like judicial independence,

public hearing, have become the basic principles of the rule of law.203 Since 1979 China has

promulgated three procedural laws, namely Criminal Procedure Code, Civil Procedure Code

and Administration Procedure Code, but due to the tradition of a dim view of procedure

justice and the selfish departmentalism204 in the judiciary, many procedures serve only as soft

constraints to the courts,205 for example, the courts can find many excuses not to dispose of

cases within the time limits, in the worst cases, even deprive the right of the parties to lodge a

claim Court delay is a common phenomenon not only in disposition but also in enforcement

of law.

5. Severe Problem of Corruption

Corruption has penetrated into the judicial field after the opening policy of China. Take the

statistics from 1993 to 1997 as an example: in all cases concerning corruption, bribery, and

abuse of power investigated by the procuralorates, there are 16,117 persons from the

202
Sheng, De Yong, Reform of Judicial System, in: Judicial Research 1996, 8* edition.
203
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 49.
204
It refers to the self interest and rent-seeking behavior by the administration in judiciary.
205
Ma, Jun Ju & Lie, De Zhong, The existing problem in current Chinese legal system and the way for improving, in: Legal
Comments, 6th edition, 1998
Chapter 2 Legal System and Civil Process in China 65

government administrations, and 17,214 persons from judicial organs. In 1998, there are

1,641 persons in procuralorates were accused of violating the law and 2,512 persons in the

courts were accused of violating the law or regulations.207 In one city court in Anhui

Province, 8 judges, including the vice president of the court and the chief judge of one

tribunal, were found to have committed corruption; in some provinces, even presidents of the

high courts were charged with abuse of power or committed corruption.208 The corruption

has not only damaged the image of the courts and the authority of law, but also social justice.

6. The Problem of Delay in Court

Reducing court delay has been a main task nowadays in the judiciary. In China, caseloads

have increased rapidly since the reconstruction of the civil law system in China in 1978 when

the "Culture Revolution"209 was over and a new era of social and economic reform started in

the country. As statistics show, during the 10 years from 1990 until 1999, the total cases

disposed of by the courts amounted to ca. 42,490,000, with an average of ca 4,249,000 cases

being disposed of by the courts per year,210 the average number is 3.4 times the total cases

disposed of in the previous 13 years from 1978 to 1989. The main features can be

summarized as: a continuous increase in cases as a result of more and more social and

economic interaction and an improving legal education among the people; the growth rate of

appeal cases is higher than the growth rate of cases filed at the courts of the first instance,

which may indicate that the quality of judgment in the first instance is low, as a result, cases

are brought frequently to the appellate courts.

The problem of court delay has been a serious problem for the past years, especially in appeal

and retrial cases; delay and backlog result in no justice to the people and distrust to the

judicial system. To the litigant, a long duration may result in waste of using civil process; to

creditors, it may lead to loss in profit or interest, or increase of cost during the wait. A long

206
The figures are from the annual report made by the Supreme People's Procuralorate on 19.03.1998
207
The figures are from the annual report made by the Supreme People's Procuralorate on 10.03.1999.
208
In Yun Nan Province, the president of the High People's Court of the Province was accused of violating the law and its
vice president of the High People's Court was charged for corrupting 250,000 Yuan; In Hainan Province, the prosecutor (a
high ranking official) was charged for corruption of 300,000 Yuan.
2
A political movement from 1968 until 1978 almost ruined the country's economy and severely damaged the Chinese
culture. Civil law system was absent and the legal system was based on centralized public rules.
210
Source: compiled from China Law Year Book regarding statistical data for all cases disposed from 1990 to 2000.
66 Chapter 2 Legal System and Civil Process in China

duration may also lead to bankruptcy of firms due to the increasing burden.211

Delays and backlogs coupled with corruption incur a high cost to the private sector and the

public in general. While court congestion and problems of law enforcement are acute in most

courts in China, it is important for the country to initiate a nationwide judicial reform to

enhance efficiency. As addressed by the President of the Supreme People's Court:

"All judicial activities of the courts shall follow the principle of public hearing, legitimacy in procedure, justice

in outcomes and strict enforcement of the court orders; Meanwhile, it must also follow the regulation on time

limit and enhance efficiency. But in practice, there exists the problem of violation the regulation of time limit and

result in court delay in many cases, the parties are dissatisfied (with the courts). The criticism of 'unable to pay

for the time'is die reflection of the problem of judicial efficiency. Only when judges dispose the cases within the

time limit, the legal rights of the parties can be effectively protected, and the meaning ofjustice can then be

realized... ,Q12

"Justice and Efficiency" have become the main topic and a task of the Chinese courts in the

new century. As the country has realized, a well-functioning judicial system and the rule of

law belong to the most important mechanisms for constructing a modem market economy.

The following chapters are an attempt to analyze the problem of court delay and its cost in

China through empirical studies of the primary and secondary data based on the samples

collected from the courts, as well as the statistics of cases from the Supreme People's Court.

Gerlring, Wiebkc, Die Wirtschaftlichen Folgen langer Verfahrensdauer, in: Schmitdtchen/Weth (Hrsg.), Der Effizienz auf
der Spur, Nomos Verlagsgesellschaft, Baden-Baden, pp. 38 - 42.
212
See the interview to the President Xiao, Yang of the Supreme People's Court during the People's Congress of China in
2002, in Legal Daily, 09.03.2002.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 67_

Chapter 3

A Survey of the Functioning of Court System: Duration of the Courts

The assessment of the civil justice is based on: litigation cost, time necessary to solve the disputes, and the

exactitude of fact-finding and application of law. Court delay, high litigation cost and miscarriage of

justice are all symptoms which impedes access to justice.

This chapter is devoted to an empirical study of court delay in China and the functioning of
the judiciary. Further, a critical evaluation on the functioning of the court system will be
made and suggestions for restructuring the court system will be presented. Because of the
exhaustive nature of the issues covered, this chapter is divided into two parts. The first part
deals with the empirical study of court delay in China. The second part presents a critical
evaluation of the court system and gives proposals on restructuring the court based on the
study of first part.

Part I : Survey of the Duration of the Court

I. Introduction

A nation needs an efficiently functioning judiciary coupled with available ADR mechanisms
provided by the private sector to foster the necessary balance between equity and efficiency
in the provision of justice.213 Backlogs, delays and payoffs increase the cost, implicit or
explicit, of accessing the judicial system. Growing times of disposition and high litigation
costs impede the use of court services by the general public for redressal of their grievances
within the court system.
In a transition economy and society like China, the desire and expectation of the general
public is growing for an efficient and equitable court system to solve disputes. However, the

213
Buscaglia, Edgardo, Law and Economics of Development, in: Encyclopedia of Law and Economics, Vol. II, de Geest and
B. Boukkaert (eds.X 1999, p.584; also see homepage (http://encyclo.findlaw.com/).
68 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

situation is not optimistic, there are many serious problems currently facing the judiciary in

China. First, courts are in shortage of finances; and due to the short history of legal education,

the lack of specially trained human capital cannot meet the challenges of the increasing

workload and complexity of cases; many judges cannot apply and interpret the law properly;

some collude with the parties and engage in other rent-seeking activities; corruption increases

the cost of using the courts implicitly; court congestion and law enforcement have become a

big concern in China; the 2-tier jurisdiction system cannot function well when dealing with

appeal and retrial cases. Secondly, the problems and irrationalities originating from the plan

of the economy is obvious in the current judiciary, like the selection and administration of

judges, the bureaucratic organization within the court system and remuneration for judges,

the reliance of budget on local governments and case flow management etc. Thirdly, despite a

speedy legislation and quick establishment of the judicial system since social and economic

reform started more than 20 years ago, the laws are still too rough and many gaps are still to

be filled. In environment such as this, where the law is rough or still blank, court delay is

more likely to happen.

The general public views that the civil courts are unable to provide adequate redress because

of court delays, high litigation costs and the complexity of the legal procedure. Moreover, law

enforcement has become a tough task for the judiciary since court orders/decrees are unable

to be enforced. The legal system is unable to provide speedy, inexpensive and simple redress

to the people in general.

In this context, the empirical study in this chapter was done to make a critical evaluation of

the functioning of the court system in respect to court delay based on primary and secondary

data, as well as interviews. First, an overview of the filing and disposition in all the courts

will be made with data collected from China Law Year Books, 214 in which yearly filings and

dispositions in the courts215 are categorized. Secondly, the empirical study of the duration of

court process will be further based on the primary data, which were randomly collected from

the District Court and Intermediate Court in Xiamen City with the help of a questionnaire.216

2,4
This annual publication is an official yearbook of the Supreme People's Court. Like the German judicial journal NJW, it
not only collects new enactments, legal interpretations issued by the Supreme People's Court, but also legal discussions
about cases, jurisprudence, law education, introduction of foreign laws and the statistics of total filing and sttlement with
category-wise illustration.
215
See Appendix III (judicial statistics from 1988 to 2000).
216
Appendix I (Questionnaire 1).
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 69_

For evaluation the problems of court delays in the High Courts and the Supreme People's
Court, samples are selected from secondary data (published cases) with details of the filings
and settlements at each stage. In order to cover all procedures in the 2-tier jurisdiction and
supervision procedure (retrial), cases with appeals and retrials are chosen to evaluate the total
duration of the cases.
Based on interviews conducted, views of the parties, judges and the lawyers in Xiamen City,
Chongqing and Beijing with regard to the functioning of the courts are presented. In addition,
personal observation about the functioning of the courts has been also taken into
consideration. Furthermore, with the help of a questionnaire,217 judges' views on the
functioning of the courts have been collected from courts in Jiangsu and Chongqing region.

II. Filing and Disposal: A Nationwide Overview and Analysis

Civil cases have increased very quickly in China after economic and social reform started in
the 1980s. During the 10 years from 1990 until 1999, accumulative trial cases disposed by the
courts have reached app. 42,490,000, with an average of app. 4,249,000 cases per year, which
is 3.4 times of the average cases disposed in the past 13 years before 1990.218 At the same
time, the number of judges is also increasing from app. 120,000 persons in 1989 to 170,000
persons in 1999. However, increasing workloads leads to excessive burden on the judges and
delays seem inevitable. The following presents some basic features of the cases in the 10
years from 1990-1999.

1. Continuous Increase in Filing and Disposition

a) Total Number of Cases Filed and Disposed by the Courts


The total cases filed and disposed by the courts, including trial cases, appellate cases and
cases under judicial supervision219 continue to increase. In 1990, the total disposed cases

Appendix II (Questionnaire 2).


218
Source: compiled from the statistics in China Law Year Book, 1991-2000, see Appendix III.
219
Cases under the procedure of judicial supervision especially refer to those cases with large dipute value and complicated
cases. These cases shall be reviewed by Ihe Trial Committee of the courts. It is regulated in Chapter 16 of the Civil
Procedure Code.
_70 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

were around 3,211,758, and in 1999 it increased to around 6,229,512.220 Table 3.1 / Graph3.1

shows the number of all trial cases and appellate cases filed in the courts and Table 3.2 /

Graph 3.2 presents the total cases disposed by the courts from the year 1990 to 1999.

Table 3 . 1 Total Cases filed in the Courts in China (1990 - 1999)

1990 1991 1992 1993 1994 1995 199f 1997 1998 1999

Trial C u e 2.916,774 2.901.685 3.051.157 3.414,845 3.955.475 4.545.676 5.312.580 5.288.379 5.410.798 5.692.434

Appellate 213,000 229,690 231,907 215,408 241,129 272,792 323,995 347,651 380,274 438,313
Cue

Judicial 81,984 83,573 81,926 69,531 64,377 70,885 76,094 86.425 89.687 98,765
Supervision

Total 3,211,758 3,214,948 3,364,990 3,699.784 4.260,981 4,889,353 5,712.669 5,722.455 5,880,759 6,229;5!2 |

Source: compiled from statistics made by the Supreme People's Court, in China Law Year Book, 1991-2000.
The total number includes pending cases of previous years.

Graph 3 . 1 Total Cases filed in the Courts in China (1990 - 1999)

7, 000, 000 -I

6, 000, 000

5, 000, 000 -
^ 4 A " T r i a l Case
1
g 4, 000, 000 - I** 1 EZZ3 Appellate
a 3, ooo, ooo - i i f^rx Case

2, 000, 000 - l l Il ll l UZZ1 Judicial


Supervision
1, 000, 000 -

0 - LLLL 1 bi_ 1 Dl_ 1h 1h 1 h_ Total

1990 1991 1992 1993 \ 994 ] 995 ] 996 997 ] 998 1 999

Teal

Source: compiled from statistics made by the Supreme People's Court, in China Law Year Book, 1991-2000.
The total number includes pending cases of previous years.

Table 3.2 and Graph 3.2 further illustrate the total cases disposed by the courts in China from

1990 until 1999.

Data compiled from China Law Year Book, 1991 and 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts T\_

Table 3 . 2 Total Cases disposed by the Courts in China (1990 - 1999)


1990 1991 1992 19*3 1994 1995 1996 1997 1998 1999 1
| Thai Cat* 2,921,806 2,950,880 3,049,959 3,406.467 3,943.095 4,533,551 5,2*5,171 5,249,260 5,395,039 5,698,705
1 ApjwlUte 208,409 230,864 236.800 219,628 239,938 271.741 321,962 340,896 379,206 436.804
| Caw
1 Judicial 96J97 84,538 83.226 73,121 67 70.865 75,230 83,512 90.029 96,793
1 Suprvifioii
1 Total 3,216,612 3,266,282 3,369,985 3,699,216 4,250,321 4,876,157 5,682,363 5.673,668 5,864,274 6,232,302 |

Source: compiled from statistics made by the Supreme People's Court, in China Law Year Book, 1991-2000.
The number includes pending cases of previous years.

Graph 3 . 2 Total Cases disposed by the Courts in China (1990 - 1 9 9 9 )

Source: compiled from statistics made by the Supreme People's Court, in China Law Year Book, 1991-2000.
The number includes pending cases of previous years.

b) Total Number of Civil / Economic Cases 221 Disposed by the Courts

Among the total cases, civil and economic cases increased very quickly and 85~90%

(compared from the figure shown in Table 3.1, Table 3.2 and Table 3.3) of the total filing and

disposition are civil/economic cases.

The steady and quick increase of the filing and disposition of civil and economic cases can be

explained by the fact that more conflicts and disputes are rising from increasing social and

economic activities and change of social norms and moral attitude of the general people since

the reform began in China more than 20 years ago. For example, very few divorce cases were

brought to the courts before the economic reform (1980's), but this changed when the moral

221
In China, there is still a distinction between civil cases and economic cases in a narrow concept. In most of the countries,
cases for economic issues are categorized as civil cases. Since the year of 2000, the Supreme People's Court begins to
integrate its economic tribunals into civil tribunals. Many local courts follow the reform and classify economic cases as civil
cases. Therefore, in mis research, 'civil cases' and 'economic cases' are included in the category of civil cases in a broad
concept.
72 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

attitude and income level changed, cases involving divorce and family issues share approx.
50% of the civil cases filed in the first instance (mainly in District and County Courts).222 In
appellate cases, there is an obvious increase in filings related to real estate and contract
disputes which reflects the quick development of local economies especially in real estate and
trade, which is coupled with many problems and disputes arising from the increasing
activities.223 Table 3.3 and Graph 3.3 illustrate the total filing and disposition of civil
/economic cases in the courts from 1990 to 2000.

Table 3.3 Civil cases / Economic Cases disposed by the Courts in China (1990 - 1999)
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
I Civil trial 1.849:728 1.910.031 1.948.949 2.091.651 2.382.174 2.714.665 3.084.464 3.242.202 3.360.028 3.517.324

Xconomic trial 598.317 583.771 648.018 894,4 lO 1.043.440 1.271,434 1,304,494 1.478.139 1.436,247 1,543.287

| Total 2.448.04S 2.4*9.002 *.***-7 3.98C0C1 3.427,614 3.98C.09* Ajmmptm 4.7M341 4.816.27S SJ08P.2U
| Trial O M -
C w i l appellate 114.401 128.396 129.079 116.638 123.00S 138.383 159.702 177.317 204.9SB 244.550

Bcooomic 33.476 39.761 43.791 43.804 36.682 69.678 83.808 86.347 89.261 95.379 1
| appellate c u t !
Total 147,87? 1*8.15? 172,8 TO M l .442 1T.87 20S.24S3 243310 M3^64 294.219 319.929
.Avpollat* Caaoa

Source: compiled from statistics made by the Supreme People's Court, in: China Law Year Book, 1991-2000.
The number includes pending cases of previous years.

Graph 3.3 Civil / Economic Cases disposed by the Courts in China from 1990 - 1999

Economic trial

t Civil appellate

Economic
appellate
cases
Total
Appellate Cases

-Total
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Year ' Trial cases

Sources: compiled from statistics made by the Supreme People's Court, in: China Law Year Book, 1991-2000.
The number includes pending cases of previous years.

The estimation of percentage is based on the cases filed in the courts.


223
Real estate has developed very quickly in China. In the earlier stage, there were many speculations in the market with
active buy-in and sell-out or unfaithful conducts in the sales. The loose regulation of the state in the sector in the 1990's
caused many disputes among the real estate developers, the constructors and the owners with respect to property rights.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 73_

Based on the above statistics compiled from China Law Yearbooks, one can see that the

settlement ratio for all the cases has been 90 - 95% each year. However, it would be too

simple to draw a conclusion that the court system is functioning well and court delay has not

been a problem in China based on the official statistics showing a high settlement ratio. There

are some simple reasons behind this: the settlement ratio does not reveal the real picture in

China, and it is confirmed even by judges in both the Supreme People's Court and the lower

courts, and by lawyers. First, the high settlement ratio has to do with the time bound program

in each court. Under this program, a target settlement ratio is established and the court must

follow it.224 Second, it is a normal practice for the courts to fraudulently report inaccurate

statistics and data is changed so that the settlement ratio appears to be high. In some courts,

judges treat filings in October of that year as new filings for the coming year so that there will

be less backlog in the courts. In many cases, especially at the end of the year, the litigants are

asked to postpone filing until the coming year, or withdraw the filing and file it again in the

coming year, or to settle the cases quickly by court-arranged mediation.225 Judges often even

sacrifice the interest of the involved parties at the cost of procedural and substantive justice in

order to pursue a high settlement ratio.

With regard to this issue, it is not to say that the time bound program is not effective or is bad,

in fact, the time bound program increases pressure on the judges for a speedy settlement and

helps reduce delay and backlog. However, the time bound program shall take the caseload

and the number of judges in each court into account and a more realistic settlement ratio

should be established. The time bound program should include some necessary measures like

framing more effective criteria in granting adjournments so as to avoid a pure pursuit of high

settlement ratios by the judges.226

224
The normal target settlement ratio established in each court is around 90%, and the target seldom takes the caseload and
the availability of judges into account. Such time bound program is confirmed by the judges and lawyers in the interviews.
225
In an interview with judges in the Supreme People's Court, judges doubt the authenticity of the statistics provided by the
lower courts. In another interview with one judge who is responsible for statistics in the district court and further interviews
with lawyers, they all confirmed these usual practice in jurisdiction.
226
Judges in China have strong incentive to realize the target settlement ratio since the promotion, salary and bonus are
bounded to the performance of the judges. It is therefore frequently complained by the parties and the lawyers that many
irrationalities exist in the civil process.
74 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

c) Increase of Other Cases (Criminal and Administrative)


Apart from civil and economic cases, the number of the criminal cases has also increased
(The number of criminal cases accounts for 8-10% of the total disposed cases indicated
already in Table 3.1 and Table 3.2). The administrative cases do not compose a large share
of the total cases, but it had a tendency to increase between 1990-1998, however, in 1999 the
increase ceased due to effectiveness of the Administration Review Act which led to some
disputes being resolved through administration review.227
Graph 3.4. shows the increase percentage of civil/economic cases and criminal cases from the
year of 1990-1995 respectively, as given above, the civil/economic cases not only share
85%-90% of the total cases, but also continue to rise at a high rate.

Graph 3. 4 The Percentage of Increase of Civil/Economic Cases and Criminal Cases


from 1990 to 1995

civil and
economic cases

Criminal cases

I 1990 1991 1992 1993 1994 1995 I

Source: compiled from China Law Year Book, edition 1991-1996

Compared with criminal cases, civil cases have a high percentage of increase each year. The
quick increase of civil/economic cases challenges the capability and capacity of the judges.
Under the condition of a low quality of human capital in general, and the limited number of

227
As referred by the an official in State Department, in 1999 when the Administration Review Act came into force, there
were more than 32000 cases filing for administration review, among which 40% of the previous administrative
decisions/orders were canceled or changed. The enactment of administration laws shows a big change in the judicial
development: the executive power and its administration shall be subject to judicial supervision under judicial framework.
See He, Bin, Restructuring the Mechanism of Dispute Resolution, in: Peking University Law Journal \fol. 14, No.l (2002),
p. 6.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 75

judges, caseloads are heavy in some of the courts and delays are likely to occur. This raises
the question of the burden of caseloads for each judge and how efficiency can be improved to
cope with the continuous increase in cases and reduce delay.

d) Average Cases Disposed by Each Judge in the Year


The workload of the judges has been increasing due to a rapid increase in cases. Take the year
of 1997 as an example, there were around 170,000 judges in all of the courts, the cases
disposed in 1997 were 5,673,868, with an average of 33 cases disposed by each judge per
year, 2.87 per month. In one provincial Intermediate Court, around 2,000 cases were disposed
by more than 100 judges, the average number of cases disposed by each judge per year is less
than 20 cases.228
Although the burden of cases differs greatly from region to region in China, the average
disposition of cases is extremely low compared with the average workload of judges in other
countries. In America, one judge disposed yearly of 300 - 400 cases on average,
approximately 15 times the average number of cases disposed by Chinese judges.229 Whereas
in Germany, one judge in the district courts (Amtgericht) disposes of 700 cases each year on
average, approximately 3.26 cases each day; most of the cases were disposed or dismissed
very quickly230 and 33% of them were mediated, around 230 of the 700 cases were mediated.
The low efficiency in jurisdiction in China can be attributed to the following reasons: first,
the average quality of judges in general is very low due to the lack of legal education, training
and experience. Most of the judges are not professional and are not experienced enough in
making judgments independently; second, judges in China spend much more time in
collection of evidence231 which consumes time unnecessarily. Compared with American
judges who are not obliged to collect evidence and whose main work is to decide the cases in
the courts, Chinese judges have to take part in the collection of evidence and spend a lot of
time in legal reasoning. Moreover, Chinese judges have to spend their time in political study

228
China Law Year Book, 1997, pp. 1238,1241-1243.
229
Source: from Annual Report of Judicial Administration of American, 1990.
230
In 1996, in the local courts (Amtgericht), 48.2% of the cases were settled within 3 months, 28.5% within 6 months and
17.5 within 12 months. See Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press 2000, p. 19.
Also see Franzen, Hans, Was kostet eine Richterstunde? - Berechnung und Folgerungen, in: NJW 1974 Heft 18, p. 785.
231
Procedure reform is undergoing in Chinese courts in the recent years and one major reform is to shift the burden of proof
(evidence-collection) to the parties. Judges in China have to take more time in evidence-collection partly due to the low
engagement of lawyers and the lack of necessary legal knowledge of the parties in civil process.
^6 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

and some social programs like birth control and legal education program for people living in
countryside,232 consequently reducing the time available for trial.

2 Quick Increase in Appellate Cases

According to the statistics created by the Supreme People's Court from 1997 -1999,
appellate civil and administrative cases increased rapidly.
Civil appellate cases increase by 14.34%, 13.36%, 18.85% respectively in the years of 1997,
1998 and 1999; ^ whereas civil trial cases increased 5.93%, 2.97% and 4.27%
234
respectively, as shown by the Graph 3.5.

Graph 3. 5 Percentage of Increase of Civil Appeal Cases and Trial Cases in 1997,1998
and 1999

Percentage of Increase

20.00%

| 15.00%
-Growth Rate of Appeal Cases
10.00%
-Growth Rate of Trial ases
5.00%

0.00%
1998
Year

Sources: compiled from the statistical data issued by the Supreme People's Court, in China Law Year Book, 1998-2000

Graph 3.5 shows the percentage of increase in civil cases filed in the courts of the first
instance and appellate courts respectively. From the comparison of the growth rate in civil
cases filed in the courts of the first instance and the appellate courts, it is revealed that appeal
cases increased at a comparatively higher rate.
Similar statistics were reported for the increase in administrative cases. The appellate cases related to

administration increased 11.35%, 12.36%, 25.92% in the year of 1997,1998,1999 respectively;235 whereas

Judges sometimes are sent to poor countryside for education programs, birth control and government food programs etc.
See Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 421.
233
Source: compiled from China Law Year Book, 1998, 1999,2000.
234
Source: compiled from China Law Year Book, 1998, 1999,2000.
233
Source: compiled from China Law Year Book, 1998, 1999,2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 77_

the growth rate of trial cases were 13.24%, 8.61% and 8.12% for the year of 1997, 1998 and 1999

respectively, as illustrated in Graph 3.6.

Graph 3. 6 Percentage of Increase of Administrative Appeal Cases and Trial Cases in


1997,1998 and 1999

Percentage of Increase

Growth Rate of Appeal


Cases
Wt Growth Rate of Trial
Cases

Sources: compiled from statistical data issued by the Supreme People's Court, in China Law Year Book,

1998-2000.

The above comparison between civil and administrative cases filed in the courts of the first

instance and the appellate courts indicate an increase in original filings of trial cases and an

increase in appeal cases. Furthermore, it is obvious that the growth rate of appeal cases is

bigger than that of the trial cases.

It must be also mentioned briefly that appeal in respect of criminal cases also increases, while

the growth rate of appeal cases is almost the same as that of trial cases. 237

236
Source: compiled from China Law Year Book, 1998, 1999,2000.
237
The rate for appeal in criminal cases (1987-1996) is reduced since the sanction is normally not so heavy injudicial
practice, as a result, the defendant will not go for appeal. On the other side, the prosecutor cares much more about the nature
of the case but comparatively less about the extent of the penalty. With regard to economic cases (1989-1997), the filing for
appeal is reduced since the economic cases are dealt with more care, as a result, the quality of the judgment is higher. With
respect to administration cases, more judgments deviate from the law since the decisions of the courts are affected by the
administration organs (especially the local governments), as a result, the appeal ratio of administration cases is high.
Therefore, the judgment quality of the civil cases and economic cases is the crucial criteria for assessing the quality of the
judgments, since the quantity of the civil/economic cases share more than 80% of all cases. Compared He, Bin,
Restructuring the Mechanism of Dispute Resolution, in Peking University Law Journal, Vol. 14, No. 1 (2002X p. 4, Footnote
7.
_78 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

3. Improved Efficiency in the Past 10 Years (1989 -1999)

In 1989 there were 120,000 judges in the Chinese courts and 3,182,194 cases were settled,

thus the average number of cases settled by each judge annually was 26.5. In 1998 there were

more than 170,000 judges in all Chinese courts and 5,864,274 cases were settled, with an

average of 34.5 cases settled by each judge annually.

Table 3.4 presents the average number of cases settled annually by each judge in 1989 and

1998 respectively.

Table 3 . 4 Average Number of Cases Settled Annually by each Judge in 1989 and 1998

1989 1998
238
Cases Settled Number of judges Cases Settled Number of judges

Pieces / Persons 3,182,194 120,000 5,864,274 170,000

Average 26.5 cases per judge 34.5 cases per judge

Sources: compiled from statistics made by the Supreme People's Court, in: China Law Year Books.

The number of judges in 1998 increased approximately by 41.67% , more than that of 1989;
240
whereas the cases settled increase 84.28%. The average number of cases settled by each
241
judge increased 30.19%. Hie above statistical figures indicate that the courts have sped up

the settlement of cases and improved efficiency over the past 10 years..

4. Imbalance in Filing and Disposition

a) Imbalance in Filing and Settlement

Filing and settlement are not balanced. As shown in Graph 3.4, the average settlement ratio is

higher than the average filing ratio in each month. From 1989 till 1998 the lowest point of

accumulated filing is in February, with approximately 2,000,000 cases and the highest point

of accumulated filing is in December, with approximately 4,400,000 cases. This shows a big

238
In China judges may not have legal education from law school. Especially in the 1980's, many judges were assigned by
the local government and they were given app. 3 months of training before they took the positions.
239
(170000 - 120000) /120000 = 41.7%.
240
(5,864,274- 3,182,194)/ 3,182,194 - 84.28%.
241
(34.5 - 26.5) / 26.5 = 30.19%.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 79_

gap in filing between the lowest level (in February) and the highest level (in December), with
a difference of 2,400,000 cases from the lowest point (February) and the highest (December).
With respect to settlement of cases, the lowest point of accumulated settlement of cases is in
January, with approximate 1,250,000 cases; and the highest point of accumulated settlement
of cases is in December, with app. 6,700,000 cases. The gap between the lowest point
(January) and the highest point (December) is app. 5,450,000 cases. This indicates the
fluctuation of settlement in each month is higher compared with the filings. Graph 3.7
presents some features of the accumulated cases filed and settled in all courts:

Graph 3. 7 Number of Filing Cases and Settlement in each Month from 1989 to 1998

7000000

c
11
lement *
6000000
Fili ng
'
5000000
/
4000000
Z^*\ <s?
- * *VN**-"' -*"" " Cs-^*^
3000000

2000000

--'
1000000

0
Jan Feb Mar Apr May June July Aug Sep Oct Nov Deo

Source: compiled from China Law Year Book, 1990-1999

With respect to settlement of cases, it reveals a feature of "3 high, 2 low", that is, the
accumulated cases settled in February, July, October were comparatively lower than the
neighboring months; the accumulated cases settled in June, Sept., December are
comparatively higher than the neighboring months; in December, the accumulated number of
settlement reached the highest point. However, from 1989 till 1998, the number of cases
(accumulated) settled in January is only 1,250,000 and the number of settlements
80 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

(accumulated) in December (6,700,000) is app. 5.36 times the number settled in January.
Furthermore, a comparison of accumulated cases settled in each month during the 10 years
indicates that the figure in August is close to the average, from January till May it is lower
than the average, and the figure from September till December is higher than the average. As
revealed in Graph 3.7, the accumulated number of settlements in each month is not even, but
has a high fluctuation as shown in the curve. In January and February the number reaches its
bottom point and in December it is at the top.242
Graph 3.8 shows more obviously a bigfluctuationof settlements in each month from 08.1997
to 05.1998, especially in January, February, and December.

Graph 3.8 Cases Settled from 08.97 to 05.98

12000000

10000000

8000000

6000000

4000000

2000000

0
Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. April May

Sources: compiled from statistical data issued by the Supreme People's Court in China Law Year Book 1998 & 1999

b) Imbalance of Settlement by Each Judge in Different Month


The settlement of cases in January 1998 by all courts in China has an average of 7,162 cases
per day (excluding official holidays - 9 days, the remaining 22 days are working days), and it
242
The high ratio of settlement in December can be attributed to the time bound program and the pressure of annual work
report to be submitted to the People' Congress Assembly, in which the Government, the Supreme People's Court & the
Supreme People's Procuralorate shall present annual reports to the National People's Congress. In order to show better work
efficiency, the courts in all level try to settle the cases by the end of the year by speedy trials, and even refuse to accept new
filings at the end of the year. The low rate of settlement in January and February has much to do with the holidays in January
and Chinese Spring Festival (normally at the end of January or in February).
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 81

means that only 0.9 cases are settled per judge in a month, or an average of 24 days is needed
for each judge to settle one case. In December of 1998, the average number of cases settled
per day was 43,599 cases (excluding official holidays - 8 days, the remaining 23 days are
working days). The average cases settled per judge was 5.9 cases and the average time for
each judge to reach a settlement for one case was 3.9 days, as indicated in Graph 3.9.
This can be explained by considering that in January, during the Chinese Spring Festival
(Chinese New Year), people are busy preparing for the celebration with family members,
shopping, traveling and with other social activities; consequently time spent for the judgment
is reduced, whereas in December judges are trying their best to settle the cases in order to
realize the target established in the time bound program of the court and in order to show
good figures in the annual report. Consequently a lot of piled up cases and cases filed in the
same year have a greater possibility to be settled in December.

Graph 3. 9 Average Cases Settled by each Judge in Jan., Aug., and December
respectively (1998)

Average Coses S e t t l e d hy Each Judge

Number o f
cases

J* Aug Dec

Source: compiled from statistical data issued by the Supreme People's Court, in China Law Year Book, 1999

c) 'Loose" in the Beginning and "Tight" in the End


Graph 3.10 shows the proportion of cases settled in the courts during 4 seasons of the year of
1998, which illustrates the disproportional settlement of cases in different periods of the year.
The graph shows that the first season has a low settlement, sharing 13% of the total cases of
1998 and the fourth season shares 36% of the total cases of 1998. In first half of the year it is
82 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

22% lower than that of the second half year. The reason may be the same as mentioned in
point b), as in the second half of the year judges work harder to settle the cases in the year so
as to realize the target settlement ratio.243

Graph 3.10 Proportion of Settlement in each Season of 1998

Second
SFirst
26% (ED Second
HThird
Fourth

Source: compiled from statistical data issued by the People's Supreme Court, in China Law Year Book 1999

5. The Problems Caused by the Imbalanced Progress in Disposition

Though efficiency of the courts has been improving over the past 10 years, there are still
many problems facing the judgment due to the disproportional number of settlements. First,
backlogs incurred in the first half of the year increased pressure to resolve cases in the second
half of the year. Take the year of 1998 as an example: at the end of June 1998 all the
congested cases for the whole country reach 858,631, namely 5.05 cases for each judge on
average; at the end of December 1998, the backlogs reach 378,911, namely 2.2 cases for each
judge on average. Secondly, the rush for settlement at the end of the year resulted in a low
quality of judgment. For example, if a civil case concerning an economic issue settled in the
trial court in December of 1997 were appealed in the appellate court, then it should be judged
243
Each court establishes a settlement ratio according to the previous caseload and the number of judges in the court. In the
interviews, it was told that the court normally set the ratio at around 90%.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 83_

and settled in April 1998 according to the time limit of disposition stipulated in the Civil

Procedure Code, whereas in the second season of 1998 the ratio of re-judgment244 ordered by

the appellate courts reached 33.28%, which is higher than other seasons, this means that the

cases appealed to the appellate courts contained mistakes and a high percentage (33.28%) of

these appellate cases were returned to the trial courts for re-judgment,245 consequently the

concentration of settlement at the end of the year does not solve the problem of backlogs

since the appeal rate is high in the coming year due to the low quality of judgment made in

the past year, and this again increases the workload of the courts and wastes judicial resources,

as well as the litigation costs of the parties. Third, as a consequence, the workload is

increased sharply in the second half of the year and affects time available for legal study,

training and other judicial programs. The imbalance in disposition of cases affects the goal of

judicial efficiency.

6. Reasons of the Imbalance in Disposition

The reasons for imbalance in disposition of cases can be summarized as follows:

(1) Holiday Effect


During the New Year and Chinese Spring Festival, which is normally in January or February,

judges spend their holidays with their families and leave the disposition of cases aside

tentatively. The holiday effect reduces the time availability of judges and the work efficiency

of the courts.

(2) Bureaucratic Burden


Reports at the end of the year take too much time in the Chinese courts; judges have to spend

time summarizing the work of the past year and dispose cases within the time limit,

consequently it increases the workload of the judges.

Judges have to face the internal and external examination246 of judicial work; further, judges

have to spend time to write plans for the coming year. As a result, the availability of time for

244
The cases are returned to the court of first instance for reopening the procedure.
245
China Law Year Book, 1999.
246
The internal examination is an assessment of performance of each judge and the external examination refers to the check
of work in the lower courts by the higher courts.
S4 Chapter 3 A Survey of the Functioning of Court System. Duration of the Courts

disposition is reduced.

(3) Inefficient Case Flow Management


The current judicial administration of the Chinese courts is still backward. The courts,

especially District Courts and County Courts, lack a computer system for support and

management of cases. In addition, case flow management is still new to many courts. Thus,

improving the management of cash flow shall also be included in the reform agenda.

(4) The Time Bound Program


The courts in China are strictly required to settle the cases within the time limit according to

the Civil Procedure Code and the Regulation on Strict Implementation of Time Limit
247
(2000), Each court has to establish a time bound program in which a target settlement ratio

is to be established. The performance of the judges according to the time bound program will

affect the remuneration, bonus and promotion opportunities of the judges. Judges have

pressure (and incentive) to settle the cases at the end of the year.

7. Findings

In the study based on primary data, which was compiled from the China Law Year Book and

other relevant publications, some findings can be presented as follows:

(1) There is a steady increase in filings and disposition of cases, as per Table 3.1 and Table

3.2. Meanwhile the average disposition of each judge has improved from 26.5 cases in

1989 to 34.5 cases in 1998, as per Table 3.4. This average is lower than the developed

countries like the US and Germany.

(2) Civil case and economic cases share 80 - 90% of the total filings and disposition,

criminal cases have a stake of 8 - 10% and the rest is administrative cases.

(3) There is an imbalance in filing and disposition in the courts, with a feature of "3 high, 2

low", namely, the accumulated cases settled in February, July and October are

comparatively lower man the neighboring months. The accumulated cases settled in June,

Sept., December are comparatively higher than the neighboring months, in December, the

number of settlements reaches the highest level, as per Graph 3.7 and Graph 3.8.

247
The regulation was promulgated by the Supreme People's Court in 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 85_

(4) The study based on secondary data reveals that the settlement ratio is very high in China.

The settlement ratio is higher than 90% (refer to Table 3.1 and Table 3.2) each year based

on the yearly filing and disposition as per the China Law Year Books. 248 The question is,

court delay has been a frequent topic and a tough task in judiciary in China, such a high

rate could be explained that the statistics might not be authentic enough due to some

improper practices in statistics.249 Additionally, it might justify many assertions that the

high cost behind the high settlement ratio: the sacrifice of procedural rights of the parties

and miscarriage of justice.250 Nevertheless, it must be admitted that the high settlement

ratio has heavily to do with time bound programs in there jurisdiction. Under the time

bound program, judges are under strong pressure to realize the target settlement ratio as

established by the court. However, the time bound program should take the caseload and

the number of judges in each court into account and a more realistic settlement ratio

should be established. The bound program should include some necessary measures like

framing more effective criteria in granting adjournments so as to avoid a pure pursuant of

a high settlement ratio by the judges while sacrificing the procedural and substantive

justice of a speedy trial.

& Suggestions

Despite a high settlement ratio, the above investigation also indicated that the efficiency of

the courts should be improved. The time availability for disposition of cases should be

readjusted so that cases will not be concentrated and congested at the end of the year whereas

only a small proportion of cases are settled in the beginning of the year. The time bound

program for settlement should also consider its workability in each court according to the

caseload and availability of judges and time for judgment. Furthermore, under a better

248
Judge Huang, Song You of the Supreme People's Court, argued that the problem of court delay has been deterred after
the promulgation of the Regulation on Strict Implementation ofTwne Limit in 2000 by the Supreme People's Court. In his
view, the duration of the courts in China is short due to the application of simple procedure in the lower courts and most of
the cases can be settled within 6 months. The efficiency of the Chinese courts is not low compared with jurisdiction in the
Western countries. See Huang, Song You, An Analysis of Judicial Efficiency, in: People's Judiciary (11) 2001, p. 21.
249
In an interview with one judge in the Research Department of the Supreme People's Court on mis issue, it was admitted
that the local courts very often change the figures in their statistical reports so as to undermine the problem of court delay.
According to some lawyers, local courts may ask the litigants not to file in the courts at the end of the year or ask the
litigants to withdraw the cases at the end of the year or file in the beginning of the year. The settlement ratio shown in the
China Law Yearbooks is overestimated in this sense.
250
Compare Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, pp. 358-361.
86 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

designed and workable time bound program in which some necessary measures like framing
more effective criteria in granting adjournments should be included, judges should settle
cases within the time limit as stipulated in the Civil Procedure Code and relevant
regulation251 so as to avoid delay and backlog.
The reform is a complicated work, which requires not only a reform ofjudicial administration
concerning case flow management, but also a reasonable allocation of time availability for
disposition of cases. First, judges should bear in mind that court delay is justice denied.
Delays not only waste time but also increase litigation costs, judicial costs and judicial
resources. Second, the work of writing annual reports, examination within the court system,
and planning for the coming year should be allocated optimally within a certain time limit so
that more time can be available for judgments. Third, from filing through judgment to
settlement of the cases, all the information should be processed more efficiently and
improved by a computer system. The Supreme People's Court has now set up a computer
system to record filings, settlements and documentation; such a system could be spread out to
cover all of the courts in China so that the judges can check records and supervise the cases in
a scientific and easy manner. Fourth, the rush for settlement at the end of the year, which
merely seeks for a settlement ratio just to satisfy the congress in the annual judicial work
report, must be changed. Fifth, the court shall arrange an optimal holiday plan forjudges so
as to avoid cases being congested during certain periods of time.

III. Empirical Study of Functioning of the Courts

Due to the rapid increase of filing and low efficiency in the judiciary, court delay has been a
disputed issue and is seen as a major obstacle of the judiciary nowadays in China. There are a
large number of cases piling up in the courts. For example, from January to July of 2000, the
settlement ratio is 69.43%; there are 1,850.000 cases still pending at the end of July 2000.252
Backlog and court delay severely affected the functioning of the courts. Justice delayed is
justice denied, court delay has not only damaged the authority of the courts and the principle

The Supreme People's Court: Regulation on Strict Implementation of Time Limit (2000).
252
Source: report on 28.09.2000 from the China News Net. These pending cases would be settled by speedy trial in the
second half year under the time bound program as indicated in the previous study.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 87_

rule of law, but also impedes the rights of the parties and leads to distrust by the general

public to the judicial system.

In this context, the empirical study attempts to investigate the duration of the court through a

sample survey. In the meantime, this study also tries to find out the causes of delay and

provides solutions to remove those delays. While reducing delay in the courts requires

sufficient manpower, the increase in judges raises complex political issues. Furthermore, the

increase in manpower does not mean that it can solve the problem of supply and demand.253

Despite the large number of judges in China, the efficiency with respect to the average

disposition is extremely low. It seems that improving efficiency by additional judges in

disposition is not resolving the problem, but more important is the time consumed for trial

and judges' competence to deal with complex cases.

In the simplest terms, delay is a problem of supply and demand; the demand for judges' time

has outrun the supply. Furthermore, the size of the backlog will affect the effort to remove

delay, since the preferment of removing the cases in the backlog will definitely affect the filed

cases. Thus it also raises the question of which cases shall be given priority for trial and the

arrangement of such will increase the cost of the other parties whose cases are postponed.

Furthermore, the discussion of court delays and remedies should recognize the basic facts of

the pattern of disposition in lawsuits. According to the statistics in the China Law Year Book

1999, 79.7% of civil trial cases were settled by mediation or disposed by trial procedure with

court decisions or orders;254 the remaining were withdrawn or reassigned. To state this

quantitatively, approximately 79.7% of the civil trial cases yearly are settled by trial,255 and

the disposition of these cases requires most of the total court time. The problem of court delay

therefore is the problem of the time consumed to dispose these cases since these cases take up

the overwhelming majority of judge's time. The following sample survey is therefore directed

233
According to an empirical study, mere is no correlation between the efficiency of disposition and number of judges. See
Edgardo Buscaglia Jr., Maria Dakolias, and William Ratliff, Judicial Reform in Latin America: A Framework for National
Development, Stanford University 1995, p. 9.
254
In 1998, the total civil trial cases amounted to 3,360,028, among which 1,540,368 were setded by mediation, 1,1515,649
were in favor of the litigants and 22,382 were reversed. The remaining 681,429 cases were withdrawn or settled by other
means. According to the law, hearing (trial) must be held in respect of mediation, court decisions/orders, or dismissal of the
cases, therefore the cases setded by trial accounted 79.7% of the total cases (1,540,368 + 1,115,849 + 22,382) / 3,360,028 =
79.7%), see China Law Year Book, 1999.
235
In contrast, most of the cases were settled before trial in America. According to an investigation made in the New York
Court, some 71% of all suits were setded without trial and the disposition of these cases requires only 16.2% of the total
court time. See Hans Zeisel, Harry Kalven, Jr., Bernard Buchholz, Court in Delay, Litde, Brown and Company, 1959, p. 5.
Court efficiency can be improved if increasing percentage of cases are settled before trial. Compare He, Bin, Restructuring
the Mechanism of Dispute Resolution, in: Peking University Law Journal, Vol. 14, No. 1 (2002), p. 10.
J58 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

toward the trial cases in the courts. The data was randomly collected from the trial courts and
appellate courts respectively. The magnitude of delay is based on cases tried in regular order,
as it reflects the best time index of delay.256

1. Sources ofData

In order to make an critical evaluation of the courts' efficiency in China in terms of delay and
costs, it is necessary to use the data with regards to filing of cases, disposal of cases and
decisions of the courts on the cases and opinions on law's delay, thus, the analysis will be
based on the primary data and secondary data in the following study. The requisite data is
compiled on the basis of:
- Primary data collected from the local courts (City of Xiamen);
- Statistical data from the publications of the Supreme People's Court and case books
(secondary data);
- The views of the j udges in respect to the problem of court delay;
- The views of lawyers;
- The views of the parties in the litigation; and
- Personal observations.

The District Court and the Intermediate Court


The study of court delay in the lower courts (District Court and Intermediate Court) is based
on primary data which was mainly collected by a sample survey in the District Court of HuLi,
Xiamen, and the Intermediate Court of Xiamen City,257 among which some cases were
provided by law firms258 so as to balance the possible difference contained in the data
processing between the courts and the law firms. These cases collected from law firms are
combined in the sampling.

236
In the study of District Court of Huli, Xiamen, duration of the cases disposed under simple procedure is also indicated.
All the cases filed in the Intermediate Court, the High Court and the Supreme People's Court are disposed under regular
order.
2
It is very difficult to have first-hand data from the courts in China since the courts keep strict regulation on the data
administration. The best way to get the information is to get the data through the powerful judges who have discretion to ask
the data administrator to do the work for researchers, or through the data administrator who is ready to help. In this study,
most of the data are provided by the data administrator in the courts.
258
The information with respect to the cases from the law firms should be much more accurate since the records are neutral
and reflect the reality; whereas the records made in the courts might contain alternation in the records.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 89

These cases concern filing and disposition made by the courts in the year of 2002. From the
District Court of Hu Li, Xiamen City, 287 trial cases were collected. Among these 287 cases,
there were 63 cases filed for appeal in the Intermediate People's Court of Xiamen.
Furthermore 213 cases were collected randomly from the Intermediate People's Court of
Xiamen and the law firms (among which 26 cases come from law firms).

The High Court and the Supreme People's Court


Due to the difficulty in getting access to first hand information (primary data) directly from
the High People's Courts and the Supreme People's Court, the study of court delay in the
High Court and the Supreme People's Court are based on secondary data which is mainly
collected randomly from publications and selected case books published by the Supreme
People's Court.

The case books include:


Selection of Appeal and Retrial Cases relating to Economic Disputes Disposed by the Supreme
People s Court (from 1993 until 1996), Vol 2, edited by Economic Tribunal of the Supreme People's
Court.China University ofPolitics and Law Publication 1997, and
Selection of Cases Disposed by the People s Court, Civil Cases Collection 1992 -1999, Vol. 1, 2 and 3,
edited by the Research Institute of China Law Application of the Supreme People s Court, China
Judiciary Publication, 2000

107 cases were selected from the case books. These 107 cases were tried by the High Courts
and were filed for appeal in the Supreme People's Court. As the Supreme People's Court
never has direct filing of trial cases, for the sake of convenience, the study of court duration
in the Supreme People's Court is further based on these 107 cases filed in the High People's
Courts for first trial and the Supreme People' Court for appeal.

In short, the study of court delay is concentrated on the cases filed in the District Court of
Huli, Xiamen and the Intermediate People's Court in Xiamen City based on the primary data,
since these local courts deal with most of the cases and the study of these courts is very
90 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

critical to the analysis of court delay in China; further study based on the published data with

respect to the High People's Courts and the Supreme People's Court will illustrate a full

picture of court duration in China, though the filing and disposition in these higher courts do

not have a big stake in the total filings and dispositions in China.

2. Sample Survey

All cases are collected from the filed cases in the courts, especially from the local courts in

Xiamen City;259 some cases are from the filing record in law firms. These cases include 287

cases from the Huli District Court in Xiamen City in which 63 cases were appeal/retrial cases,

and 213 cases from the Intermediate People's Court of Xiamen. The collected data are

category-wise filed and disposed civil cases. These cases were collected by the method of

Stratified Random Sampling from the courts.

Based on a review of filed cases, all of the data were collected by a designed and structured

questionnaire l. 260 The questionnaire also includes some items which interview complainants

about their attitude towards court delay and the costs incurred in the cases, these interviews

help find out how costs affect the complainants' decision to go to court and how it could

affect the speed of the judgment.

Further, a sample survey was also made to discover the duration of disposition in the High

Courts and the Supreme People's Court, 107 trial cases filed in the High courts were collected.

These cases were further brought to the Supreme People's Court for appeal. The study of

these 107 cases not only illustrates the duration of disposition in each tier of jurisdiction, but

also the total duration from filing in the High Courts until it's final jurisdiction made by the

Supreme People's Court.

a) District Court of Huli, Xiamen

(1) Disposed/Dismissed Civil Cases Categorized


The investigation was made in the District Court of Huli, Xiamen with 287 cases randomly

239
Xiamen City is located in Fujian Province and is one of the economic centers in south of China; and it is one of the 4
Special Economic Zones which were established by the central government in the beginning of 1980s to attract foreign
investment.
260
Contents of the questionnaire please see Appendix I.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 9^

chosen and analyzed. The District Courts and County Courts are responsible for trial cases
and have no appeal jurisdiction. Table 3.5 presents the duration of the category-wise cases.

Table 3.5 The Duration of Cases by the District Court of HULI (N = 287)
Type of Cases <30 30-90 90-180 180- 3 6 0 - 5 4 0 - >720 Total Percentage
days days days 360 540 720 days
days days days
Family issues, 18 30 11 3 1 0 63 22%
1 like divorce
Heritage 2 15 2 1 1 0 21 7.3%

1 Rental disputes 7 6 8 6 2 0 29 10.1%


Contract 18 33 12 8 2 1 1 75 26.1%
1 Disputes
Consumer 1 5 5 0 0 0 11 3.8%
Products
Real 3 13 12 3 3 0 34 11.8%
Estate
Transportation 8 12 5 2 1 0 28 9.8%

Personal injury 5 17 2 2 0 0 26 9.1%


Total 62 131 57 25 10 1 1 287
Percentage 21.6% 45.6% 19.9% 8.7% 3.5% 0.35% 0.35% 100% 1
Source: compiledfromthe data collected from the District Court of Huli, Xiamen

Table 3.5 presents the category-wise number of 287 cases disposed in the first instance by the
Huli District Court in the year of 2002.261 From the statistics it is evident to see that contract
disputes (26.1%) and family issues (22%) dominated the number of cases filed in the court,
followed by real estate accounting for 11.8% and rental disputes accounting for 10.1%, the
others are transportation (accounting for 9.8%), personal injury (9.1%), heritage (7.3%),
consumer products (3.8%) respectively.
Among 287 cases, 125 cases were disposed under simple procedure, 18 of them exceeded the
time limit of 90 days according to Civil Procedure Code; 162 cases were disposed by normal

261
The Huli District Court has disposed / dismissed around 7,000 cases in the year of 2001, 5,800 cases in 2002, as
informed by the administrator for the statistics.
^2 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

procedure, 37 of them exceeded the time limit of 180 days as regulated by the Civil

Procedure Code.

Most of the cases disposed within the time limit are concerning divorce, neighborhood

conflicts, tort, and small value contract disputes. From the cases collected, 'dispute value' of

70% of the cases is within the range of 1000 - 10,000 Chinese Yuan (app. 121 - 1210 USD).

The facts of the cases are clear and evident to all the parties and therefore it is easy for the

judges to make decisions on these cases in short time.

(2) Time Taken to Dispose/Dismiss the Cases


In terms of duration, among the 287 cases, 62 cases were disposed within 30 days

(accounting for 21.6%), 131 cases were disposed in 30-90 days (accounting for 45.6%), 57

cases were disposed in 90-180 days (accounting for 19.9 %), 25 cases were disposed in

180-360 days (accounting for 8.7%) and 10 cases were disposed in 360-540 days (accounting

for 3.5%), 2 cases exceeded 540 days.262

(a) Average Duration


Through calculation of the duration of the samples, the average time consumed by these

287 trial cases, which were settled in the District Court of Huli, Xiamen, is 56.5 days for

cases with simple procedure and 155 days for cases in regular order.

Graph 3.11 illustrates the 287 cases disposed by the District Court of Huli, Xiamen and the

corresponding time.

262
According to China Law Year Book 1998, the duration of the trial cases in China is short. In 1997, the number of trial
cases is 5,349,460, among which 79.61% of the cases were settled by simple procedure within 3 months; 18.43% of the
cases were disposed under regular order within 6 months; and 1.96% of the cases exceeded 6 months for disposition. Also
see Huang, Song You, An Analysis of Judicial Efficiency, in: People's Judiciary (11) 2001, p. 21.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 93^

Graph 3. 11 Cases disposed by the District Court of Huli, Xiamen and the
corresponding Time

Up to 30 30 - 90 90 - 180 180 -360 360 - 540- 720 over 720


days days days days 540 days days days

Source: compiled from the data collected from the District Court of Huli, Xiamen

From the statistics one can see, that family issues (especially divorce) and contract disputes

dominated filings and disposals; the others are disputes involving transportation, consumer

products, personal injury, rental dispute, real estate, heritage etc., which indicates that the

District Court mainly deals with cases close to the daily life of normal people; most of these

cases are clear and evident in fact-finding and thus can be disposed within the time limit.

(b) Average Consumption of Time in Each Phase of the Trial


Table 3.6 shows the average time in each phase of trial and the total average time of

consumption. The advantage of simple procedure 263 (125 cases) in time consumption is very

obvious compared to the normal procedure 264 (162 cases) at the court of the first instance

(District Court). The application of simple procedure saves a lot of time in the phases of

pretrial preparation and hearing.

263
According to Civil Procedure Code, cases filed in the District Courts shall first apply the simple procedure, and normal
procedure shall be applied if the case is found as 'complicated'. Cases under simple procedure shall be settled within 3
months after filing.
264
Normal Procedure refers to procedure in regular order.
94 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Table 3.6 Average Time Consumption in each Phase and Average Duration of the Cases
in District Court, Huli, Xiamen

III
Filing Pretrial Hearing Discussio Settlement No. of Percentage

(days) Preparation (days) n/Mecting (days) Cases Of Cases

(days) (days) exceeding exceeding Time

Time Limit

Limit

Simple 3.8 20 15.6 7.9 9.2 56.5 days 18 14.4%

Procedure2*5

Normal 5.4 65 52 16.6 16 155 days 37 22.84%

Procedure 2 "

Source: compiled from the data collected from the District Court of Huli, Xiamen.
Remark: among the 287 cases, 125 cases were settled by simple procedure and there were 63 appeal cases filed in the
Intermediate Court of Xiamen. The analysis of appeal cases will be further made in b).

Graph 3. 12 reveals the average time consumed in each phase of the cases settled in regular
order (Normal Procedure).

Graph 3.12 Average Time Consumption in each Phase of Disposition

Source: compiled from the data collected from the District Court of Huli, Xiamen

265
According to Art. 142 - 146 of Civil Procedure Code, the Simple Procedure is applicable in the lower courts (District
Courts and Intermediate Court, normally for cases filed in the District Court) for cases with clear and evident facts, as well
as small dispute values; oral filing is allowed and hearing is much more flexible under simple procedure; one judge can be
assigned to make the judgment.
266
In normal procedure, the case shall be settled within 6 months after the date of filing, and it can only be prolonged for
another 6 months with the consent of the President of the court. A further prolongation must be permitted by the higher court
of the region. See Art. 135, Civil Procedure Code.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 95_

It is obvious that pretrial preparation took a large proportion (41.93%) of time consumption in
these cases. This also indicates the reform in recent years focusing on pretrial and
introduction of an adversarial system in the hearing may have positive effects on the
efficiency of judgments.

(3) An Anatomy of Workload in Huli District Court


In Huli District Court there are 28 judges and 5 clerks, the number of cases
disposed/dismissed in 2002 is 5,800,267 with an average of 207 cases in one year for each
judge, or 17.25 cases per month for each judge. The high rate of filing and disposition in this
court is due to the fact that many residents in the district come from other cities/provinces and
work in the industrial zones in the city, consequently, civil disputes and contract disputes
happen every day in this area
The time distribution in daily work is as follows: 5 working days a week, 8 hours each day,
the total working days for one year is 239 days.268 Further, judges have to spend time in other
activities, which are not related to disposition of the cases. According to an estimation based
on the information available from the courts and personal observation, each year judges will
spend:

- 30 days for meetings and study (both political and legal study are organized by the
court)
- 10 days for social activities: environment activities, legal consultancy for the public
etc. (These activities are also organized by the court or the local government)
- 15 days for traveling (for example, evidence-collecting in other cities)269

Thus, the total time available for judgment is 184 days (239 - 55). Based on this assumption,
the workload for each judge in District Court of Huli, Xiamen is very heavy. Each judge must

267
Data provided by court clerk of the court. Caseload varies from court to court in China. For example, in Xiamen city, one
District Court has around 90 judges and they dispose around 1,2000 cases in one year, while another one has 22 judges and
has filing and disposition of only 230 cases in one year.
268
239 working days is calculated by deduction of all holidays in the year: weekends (52 X 2 = 104 days) and 7 days off in
May, 7 days off in October, 8 days off in Chinese Spring Festival.
269
Compared with judges in other countries, the Chinese judges spend more time for traveling to collect evidence.
96 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

dispose 1.1 cases each day.270 This result is however quite different from the findings made

previously by the survey on average disposition in all of the courts in China (refer to Graph

3.6): the average disposition in this court is much higher than the average based on the

nationwide level. The explanation behind the difference lies in the caseload in different

regions. In fact, caseloads are different from court to court and region to region in China.

Despite the low average disposition at the nationwide level, in China, most of the courts in

the coastal area, especially the district courts, have a high record of filing and disposition due

to its high density of population and increasing economic and social interactions among the

population. For example, each judge in Huangpu District Court/Shanghai disposed 74.7 cases

on average (2.49 cases per day!) in 1999;271 whereas the filing in the courts located in the

western regions are comparatively less. The caseload may be very low in the court, even less

than 200 cases per year; in some courts, some judges are assigned for judicial administration

and social matters because there are no cases for disposition.

Cases filed in the district courts are normally small claims, tort, family issues etc, they are

easy to resolve by simple procedure. The city of Xiamen is a special economic zone in China

and has a high level of economic activities and its inhabitants come from all over the country.

With more economic activity and dense population, it is no surprise that caseload is high.

In comparison, the working days for a German judge are 215 in a year, after deducting the 30

days of holiday.272 One judge in the district courts (Amtgericht) disposes 700 cases each year

on average, or each day 3.26 cases. 67% of the cases were disposed or dismissed very quickly

and 33% of them were mediated, namely, around 230 cases were mediated. In the local courts

(Amtsgericht), 48.2% of the cases were settled within 3 months, 28.5% within 6 months,

17.5% within 12 months. The average duration of the local courts from filing until settlement

was 4.6 months, but there 4% of the cases were delayed for more than 3 years. It implies that

the legal system in Germany is highly efficient.273

270
5800/(184x28)= 1.1
271
He, Bin, Restructuring the Mechanism of Dispute Resolution, Peking University Law Journal, Vol. 14, No.l (2002), p.
15.
272
This figure does not take hospital time into consideration, see Franzen, Hans, "Was kostet eine Richterstunde? -
Berechnung und Folgerungen", in NJW 1974, p. 785.
273
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, pp. 18, 19.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 97_

(4) Findings
Based on the sample study of 287 cases collected from the District Court of Huli, Xiamen,
the finding can be summarized as follows:
So far there is no serious court delay concerned with trial cases filed in the District Court of
HuLi, Xiamen, and the average duration of disposition is 56.5 days for cases disposed under
simple procedure and 155 days in regular order The average duration is more or less within
the time limit274 as regulated in the Civil Procedure Code. The reason is that most of the
cases are small claims and are clear in facts and application of law is easy.
There is no summary court or summary tribunal in lower courts, but all cases filed in the
District Court shall first apply simple procedure; only when judges find out that the case is
complicated and cannot be solved in a short time, then the procedure will be turned into
regular order. The short duration concluded from the sample survey is due to the fact that
many of the cases surveyed were settled by simple procedure since the dispute value is small
and it is easy for the judge to make decision. In China, around 80% of the cases filed in
district courts are settled through simple procedure.275 But of 287 cases, 125 cases (43.55%)
were disposed by simple procedure, which requires the judges to solve the cases within 3
months.
With respect to dispute value, most of the dispute values of the cases (66.86%) ranged from
5,000 to 50,000 Yuan.
The high record of filing and disposition in this court has to do with the density of the
population and level of economic and social development found in the region.
Judges in the District Court have heavy workloads due to the increase in cases in recent years.
As known, the average qualification of judges is low, especially in the lower courts. Judges in
the lower courts spend a lot of time in meetings and social service. The availability of judges
and time for trial activity is therefore discounted.
Nevertheless, the efficiency of the court is not low in the District Court of Huli, Xiamen. As
indicated, each judge disposes 1.1 cases per working day. This average is comparatively

274
The time limit for trial cases is 6 months in regular order, a prolongation of 6 months is possible with the permission of
the president of the Court if mere is special reason. For further prolongation, it must be subject to the permission of the
higher court of the region.
27
Zhang, Wu Sheng, Research on some problems of reform in lower courts, in: Vol. 2 Review of Judicial Reform, China
Judiciary Publication, 2001, p. 204. Compare Huang, Song You, An Analysis of Judicial Efficiency, in: People's Judiciary
(11) 2001, p. 21.
98 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

higher than the average at national level.276 On the other hand, it may be concluded that the
current problem of case overload and personnel shortage in many other courts can be solved
through efficiency-enhancement, such as by re-assigning the work of judges from
administration to trial, by increasing the working time for trial, and undertaking procedural
reform etc.

b) Intermediate Court ofXiamen City

Further investigation has been conducted in the Intermediate Court of Xiamen City, in which
213 trial cases were selected. These cases were chosen randomly from the Intermediate
People's Court in Xiamen and some from the city's law firms (26 cases). All the data were
collected by a designed and structured questionnaire,277 based on a review of the filed cases.
The questionnaire also included some items to interview complainants about their attitude
toward court delay and the costs incurred in the cases, these interviews would help find out
how costs affect complainants' decision to go to court and how it could affect the speed of the
judgment.
Additionally, 63 cases with appeal or retrial procedure conducted by the Intermediate
People's Court of Xiamen were selected from the 287 trial cases filed in the District Court of
Huli to see the total duration cases from filing until final jurisdiction; furthermore, the
average duration of 16 retrial cases will be illustrated.

(1) Original Filing and Disposition


(a) Disposed/Dismissed Civil Cases Categorized
Table 3.7 presents 213 filed and disposed/dismissed trial categorized cases selected from the
Intermediate People's Court.

276
The burden of cases on the judges differs from region to region. In less developed region, the workload forjudges is low
as there are few cases; whereas in costal areas where the economy is much more developed, the caseload is very heavy. For
example, in Chao Yan District Court of Beijing, one judge disposed more than 400 cases per year, in Huangpu District Court
in Shanghai, one judge even disposed more than 700 cases per year, but in some backward regions, each judge may dispose
less than 10 cases a year. See He, Bin, Restructuring the Mechanism of Dispute Resolution, Peking University Law Journal,
Vol. 14, No. 1(2002), p. 15.
Contents of the questionnaire please see Appendix I.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 99^

Table 3 . 7 The Duration of Cases by Intermediate People's Court of Xiamen ( N = 213)


<30 30-60 60-90 90-120 120- 150- >180 Total Percentage
Type of case days days days days 150 180 days
days days
Contractual 1 3 3 7 7 29 21 71 33.33%
disputes
Real estate 1 1 3 2 2 12 28 49 23%
Bankruptcy 0 1 5 7 11 3 15 42 19.72%
Property right 0 0 3 3 5 3 6 20 9.39%
Transportation 0 1 2 2 5 8 13 31 14.56%
Total 2 6 16 21 30 55 83 213
Percentage 0.94% 2.8% 7.5% 9.9% 14.1% 25.8% 38.96% 100%
Source: compiledfromthe data collected for the Intermediate People's Court of Xiamen.

Most of the cases are related to disputes in contract, real estate and bankruptcy. It reflects that

in the process of economic transition, conflicts arising from business interactions are frequent

and inevitable. Investment in construction and real estate have become the main economic

activity in the country; furthermore, as a result of economic reform, many inefficient

state-owned firms cannot survive in the market economy, the role of these state-owned firms

fade away in the national economy, whereas the private sector is playing a more and more

important role in economic development.

Table 3.7 shows that among the 213 cases, 33.33% of the cases concern contract disputes;

23% of the cases involve real estate; bankruptcy cases share 19.72%; cases concerning

property rights share 9.39%; the rest, 14.56%, are cases involving transportation.

(b) Time Taken to Dispose/Dismiss the Cases

Table 3.7 reveals that 2 cases (0.94%) were disposed within 30 days; 5 cases (2.8%) were

disposed within 30-60 days; 16 cases (7.5%) were disposed within 60-90 days; 21 cases

(9.9%) were disposed within 90-120 days; 30 cases (14.1%) were disposed within 120-150

days; 55 cases (25.8%) were disposed within 150-180 days; 83 cases (38.96%) were disposed

more than 180 days.

Some disputes can be solved very quickly, even if the dispute value is large, since the

evidences and documents are easy to collect concerning big contracts and it is easier for the

judges to make decisions based on clear and evident facts. However, some disputes may take
100 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

a long time due to the complexity of cases and conflicts of interest. For example, one case
disposed by Xiamen Intermediate People's Court has not yet been settled because the court
order was rejected by the state-owned trading house; the case has taken more than 10 years to
progress through the procedure of trial, appeal, retrial and further appeal for retrial
procedure.278

(aa) Average Duration


The average time of disposition, based on the 213 trial cases, is 8.7 months (261 days).
Compared to the duration of trial cases disposed by the District Court of Huli, Xiamen, the
Intermediate Court of Xiamen City, as an example, needs a longer time to dispose trial cases.
This may be attributed to a larger dispute value and more complicated cases being filed in the
Intermediate Court of Xiamen.
The following Graph 3.13 illustrates the 213 cases disposed by the Intermediate Court,
Xiamen and the corresponding time consumed.

Graph 3. 13 Cases disposed by the Intermediate Court, Xiamen and the corresponding
Time

Source: compiled from the data collected for the Intermediate People's Court of Xiamen

278
Retrial procedure is often used when the parties do not agree with the final decision of the court. As a constitutional right,
the parties can complain the unfairness of the judgment to the Supreme People's Court or the People's Congress in local or
higher level even after retrial. There is no restriction of times of disposition for retrial procedure.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 101

In contrast, in Germany, most of the lawsuits filed at the regional courts (Landsgericht) can
be settled within a reasonable time limit. For instance, in 1996, 38.9% of the cases were
disposed within 3 months by the regional courts (Landsgericht), 5% within 6 months, 21.7%
within 12 months and 9.6% within 24 months. The average duration of all the regional courts
from filing until settlement is 6.5 months.279

(bb) Average Time Consumed in Each Phase of Trial


As indicated in Table 3.8 and Graph 3.14, pretrial preparation (93 days) and hearing (82 days)
consume most of the time of disposition, since the parties spend time in collecting evidence,
fact-finding, and preparing for the hearings. This phase of filing needs 6.5 days on average;
discussions by the Collegial Panel consume 43.5 days and this phase of settlement requires
36 days. Compared with the simple cases disposed by the District Court, it consumes more
time in each stage of trial, which may affirm the additional complexity of the cases.

Table 3.8 Average Time Consumption in each Phase and Average Duration of the Cases
disposed by the Intermediate Court of Xiamen (as court of first instance. Sample: N =
213)
Filing Pretrial Hearing Discussion Settlement Average No. of cases Percentage

(days) Preparation (days) (days) (days) Duration exceeding Time of Cases

(days) (days) Limit exceeding

(days) Time limit

(days)

First 6.5 93 82 43.5 36 261 168 78.8%

Instance

Source: compiled from the data collected for the Intermediate People's Court of Xiamen

Graph 3.14 reveals the average time consumed in each phase of the cases settled in regular
order (normal procedure).

279
. Gottwald, Peter, The German Administration of Civil Justice, in: Civil Justice in Crisis - Comparative Perspective of
Civil Procedure, Oxford University Publication 1999. Also in: Qi, Shu Jie, Research on Reform of Civil Procedure Law,
Xiamen University Press, 2000, pp. 18, 19
102 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Graph 3.14 Average Time Consumption in each Phase of Disposition

Source: compiled from the data collected for the Intermediate People's Court of Xiamen

(2) Cases under Appeal and Retrial Procedure: from First Instance to Appeal/Retrial

(a) Cases Filed for Appeal in the Intermediate Court


63 cases from the District Court of Huli (among the 287 samples as indicated above) were
filed for appeal or retrial procedure280 in the Intermediate Court of Xiamen for final
jurisdiction. The following analysis is to find out the total duration of these appeal cases and
retrial cases from it's filing in the original court until final jurisdiction in the appellate court.
In 63 appeal cases, 16 were under judicial supervision for retrial.
Table 3.9 reveals the duration from filing in die District Court (as court of first Instance) and
thefinaljurisdiction made by Intermediate Court of Xiamen (as court of appeal respectively.

280
Often, retrial is regarded as a new case filed in the court in statistics. In this study, it is treated as continuation of the trial
of original cases.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 103

Table 3.9 The Total Duration of Appeal Cases made by Intermediate People's Court of
Xiamen (N = 63)
Days <30 30-60 60-90 90-120 120 - 150- >180 Total
150 180
First 7 15 6 6 4 12 13 63
Instance281
Delivery of Very difficult to measure. In reality it is one of the main reasons
Documents282 of delay*
Appeal 1 3 12 13 6 11 18 63
Retrial283 0 0 0 1 2 4 9 16 |
Time consumed to deliver file from trial court and to appellate court is 'blind* and it is the major reason of delay. After
filing for appeal, court clerk needs at least 20 days to pack up the file, 7 days for post and 10 days to notify the litigant to pay.
In practice, such period take 1 - 3 months for delivery of file.284

These 63 appeal cases concern disputes of property right regarding real estate, contract, tort,
heritage, debt and/or loan.
Among these 63 appeal cases, 16 of the cases were further under retrial procedure after the
judgments made by the appellate court due to the following reasons: 10 cases were appealed
again for retrial by the parties because of discontent with the court orders/decrees; 4 of them
were initiated by the president of the court and were presented to the Trial Committee for
reconsideration as the president of the court viewed that the judgments made contained
mistakes; another 2 cases were complained and challenged by the local procuratorate as they
disagreed with the judgments and therefore challenged the court orders made by the court.
Thus, 16 cases in total were under supervision procedure for retrial.

(b) Time Taken to Dispose/Dismiss Appeal and Retrial Cases: from First Instance to
Appeal/Retrial
Table 3.10 reveals the average duration of cases in each phase of the trial and the total
duration from District Court to the Appellate Court. 63 cases disposed originally by the

281
It refers to the trial in the District Court.
282
It is regulated that the file shall be transferred to the higher court within 5 days after filing of appeal. In practice the time
limit is very difficult to be respected due to many reasons.
283
There is no regulation on judicial hierarchy in retrial. According to Civil Procedure Code, the court which adjudicates the
case can undertake retrial. For example, if the court order/decree is made by the court of first instance, men retrial will be
conducted according to the procedure in the court of the first instance; if court order/decree is made by the appellate court,
then the retrial will be in accordance with the appeal procedure; in case the higher court and the Supreme Court retrial the
case according to the procedure of judicial supervision, the retrial procedure will be then in accordance with appeal
procedure.
It is confirmed by formal Judge H.J. He, now a lawyer.
104 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

District Court of Huli were brought for appeal in the Intermediate Court of Xiamen, among
which 16 are under retrial procedure

Table 3. 10 Average Time Consumption in each Phase and Average Duration of the
Cases disposed by the Intermediate Court of Xiamen (as appellate court).
Duration Filing Pretrial Hearing Discussion Settlement Average No. of Percentage
(day) Preparation (day) (day) (day) Duration Cases Of Cases
(day) (day) exceeding exceeding
Time Limit Time Limit

First 6 45 38.6 28.4 27 145 13 20.6 %


Instance
Appeal 5.6 56 60 66 30 217.6 48 76.2%

Retrial The parties can apply for retrial within 2 years after the court 336*
decision made by the court
5 51 116.5 177 26 375.5 No time limit required

Remarks:
1: *336 days is the time from the date of court order is made by the court until the application for retrial is accepted by the
court It is based on the calculation and estimation from reading of the cases.
2: The parties can apply for retrial within 2 years after the court order is made.

In the appellate stage, as indicated in Table 3.10, pretrial preparation does not consume as
much time compared to the time consumed in trial court, the explanation is that the evidence
have already been presented to the court, and thus the judges in appellate court can
concentrate on hearings and internal discussions with respect to questionable or points of
dispute and how to apply the law; Table 3.10 reveals that discussion consumes much more
time than the time consumed in the trial court, this may reflect that appeal cases are more
complicated with regard to disputes in fact-finding and application of law. In the phase of
settlement it makes no big difference in time consumption between the trial court and the
appellate court.

(aa) Average Duration from Original Filing to Final Jurisdiction


Duration of most of these civil cases filed in the court of the first instance (District Court)
were more or less within the time limit of 6 months, the average duration in the court of the
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 105

first instance is 145 days. However, appeal consumed much more time compared to trial in
the court of the first instance: 16 cases were disposed within the time limit of 90 days as
regulated in the Civil Procedure Code; the duration of rest of the cases (47 cases) exceed the
time limit of 90 days for appeal cases. The average duration of these 63 cases in the appellate
court is 217.6 days. Therefore, the duration concerning appeal cases based on these 63
samples is 362.6 days (145 + 217.6), beginning from filing in the District Court (Trial Court)
and commencing when the final court orders/decrees were made by the Intermediate Court of
Xiamen (Appellate Court).

(bb) Average Duration of Cases with Retrial Procedure


For the 16 cases under retrial procedure, the duration of the retrial procedure ranges from 1
to 3 years.285 The average time of disposition for the 16 retrial cases is 375.5 days or 12.5
months from applying for retrial until final judgments was made, and 711.5 days (336 +
375.5) or 23.71 months calculating from court orders made by appellate court until final
settlements were made by the retrial court. The average time consumption from original filing
until the final settlement exceeds 2 years. Though the retrial cases do not have large
proportion in the total filings and dispositions,286 it has a big stake in appeal cases, and more
around 20-25% of the appeal cases were further tried under judicial supervision procedure,
namely, by retrial.287 It is obvious that these cases with retrial procedure consumed not only
time and cost, but also judicial resources due to no restriction of time limit and times of
disposition in regulation.

(3) An Anatomy of the Workload in the Intermediate Court of Xiamen


There are around 192 personnel in the Intermediate Court of Xiamen, among which 103 have
285
Some cases consumed even more time under retrial procedure. In the investigation, some cases took more than 9 years
until the final judgments were made by the retrial courts. In these 16 samples, such case with more than 9 years duration is
not taken into consideration so as to avoid big deviation from the real situation.
286
According to the calculation based on China Law Year Book, 1990 - 2000, retrial cases or cases under judicial
supervision only share 1.5% - .2.5% of the total filings and dispositions in the courts in China.
*" According to China Law Year Book, 1991-2000.
The proportion of retrial cases is comparatively higher in the High Court. According to a statistics made by the High Court of
Hainan province, in 2000, the High Court of Hainan province received 1376 cases, among which 311 cases (22.6% of the
total filings) were retrial cases, in the Intermediate Court of Haikou of this province, the court received 1710 filings and 140
cases were retrial cases (8.2%), whereas in the District Court of Xinhua of Haikou city, the court received 3716 cases and
retrial cases amounted to 42 (1.1%X this indicated that the higher the judicial hierarchy, the more the filing of retrial cases,
since the litigants believe that the quality of the higher court will be higher. See Zhang, Ai Zhen, Some Suggestions on
Restructuring the Judicial Supervision in China, in: People's Judiciary (10) 2001, p. 19.
106 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

the title of judge; the others are court police, clerks, and administrators.
The total working days for the year are 239 days,288 5 working days a week, 8 hours each
day.
The workload for the judges in this court is heavy as they have to deal with approximately
4,200 cases each year, including trial cases and appellate cases.289 The average number of
cases adjudicated by each judge in one year is app. 40.78, or 0.17 case each working day.
In reality, the number of judges responsible for jurisdiction is only 53. It means that only
around 50% of the judges are assigned for jurisdiction, the remaining judges are mainly
engaged in administrative matters.290 Moreover, judges have to spend their time for other
activities such as meetings, social activities and traveling, which are estimated to be the same
as the estimation made for the District Court of Huli, Xiamen:
- 30 days for meetings and study (both political and legal study are organized by the
court)
- 10 days for social activities: environment activities, legal consultancy for the public
etc. (organized by the court or the local government)
- 15 days for traveling (for example, evidence-collecting in other cities)

Thus, the total time available for judgment is 184 days (239 - 55). Based on this assumption,
the workload for each judge (53 judges) in Intermediate People's Court Xiamen is very heavy.
Each judge must dispose 0.43 case each working day.291

(4) Findings:

(a) Hie duration of cases originally filed in the Intermediate court is longer. The average time
for trial cases to be disposed by the Intermediate Court is 8.7 months (261 days). Although
the economic cases originally filed in the Intermediate Court of Xiamen has a relatively

288
The 239 working days do not excluded the weekends (52 X 2 - 104 days) and 7 days off in May, 7 days off in October, 8
days off in Chinese Spring Festival.
289
Data available through interview with judges in the Intermediate Court of Xiamen.
290
A similar investigation in the setup of courts also reveals that 46.5% of the court personnel engage in administration of
the court. Compare Wu, Dong Yu and Hua, Shi, An Investigation and Comment on the Internal Setup and Categorized
Personnel Management of the People's Courts, in: Zhang, Wei Ping, Review on Judicial Reform, Vol. 4, China Judiciary
Publication, pp. 438, 336,447.
291
4,200/(184x53) = 0.43
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 107

higher dispute value (normally exceeding 2 million Yuan), some can also be resolved quickly
and can be settled within the time limit as regulated in Civil Procedure Code, as the parties
normally have complete evidence and documents in hand.

(b) There exists serious delay concerning cases under appeal and retrial procedure since most
of the appeal cases are more complicated, or have big dispute value. Retrial procedure is not
strictly regulated in respect to time limits in evidence collection and times of disposition. The
average duration of 16 cases under retrial procedure consume 711.5 days commencing from
court orders/decrees made by the appellate court until the final settlement was made by the
retrial court.
The workload in the Intermediate Court of Xiamen is heavy. Most of the cities in the coastal
areas like Xiamen experienced quick economic development, meanwhile disputes also
increased quickly due to the intensification of economic and social interaction between
people. The average number of cases disposed by each judge in the court was 40.78 cases per
year, or 0.17 cases per working day. Efficiency could be improved if more judge's time could
be assigned for jurisdiction of cases rather than administrative matters.

(c) In general, the Intermediate Court in China serves as a court of final jurisdiction. Such a
2-tier jurisdiction system leads to a congestion of appeal cases in the Intermediate Court since
80-90% of the civil cases are filed in the District/County Courts and the Intermediate Courts.
The final jurisdiction on civil cases made by the Intermediate Court has severely affected the
unification of the application of law and the quality of the judgment, since the local courts are
lower in the hierarchy, the understanding and application of law differs from region to region;
besides, the application of law is strongly influenced by local interest and interference.292
Unlike the 2-tier jurisdiction in China, most other countries apply a 3-tier jurisdiction. The
High Court or the Supreme Court enjoys final jurisdiction on cases, and very few cases are
filed and disposed by the Supreme Court. The final jurisdiction in higher courts and the
Supreme Court under a 3-tier system may be better in law application considering the

292
Zhang, Wu Sheng, Research on Problems of Reform in the Lower Courts, in: Review on Judicial Reform Vol. 2, China
Judiciary Publication, 2001, p. 204.
108 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

'filtering' function of the lower courts.293

c) The High People's Court

The High Courts in China are responsible for important cases within its' territory of
jurisdiction294 and serve as appellate courts for the local courts. The study of the duration of
original filing in the High Courts is based on secondary data295 107 original filings in the
High Courts were collected to analyze the duration of disposition incurred in the High Courts
in China As the number of cases available in the single provincial High Court is limited, the
samples being collected here are not limited to the filings in a specific High People's Court.
These 107 cases were brought for appeal. Therefore, further analysis of duration of
disposition of cases in the Supreme People's Court is also based on these samples.

(1) Original Filings in the High Courts


With respect to original filings in the High Courts in China, 107 cases filed in the High
Courts with appeal in the Supreme Court were collected.
There are some common features in these cases:
- The number of filing in each provincial High Court is limited per year, as already explained
above.
- The dispute value of these cases is comparatively big, which is normally over millions of
Chinese Yuan.
- Cases filed in the High Courts are normally concerning economic issues, mainly contract
and property disputes.

(a) Filed and Disposed/Dismissed Cases Categorized


Table 3.11 reveals both the duration incurred in the High Courts.

293
Those cases which are simple, clear and evident in fact-finding can be solved by the lower courts in the first trial, thus,
only complicated cases will be brought to the High Courts for appeal.
294
Art. 20 of Civil Procedure Code.
295
These 107 cases are randomly selected from the case books edited and published by the Supreme People's Court. In:
Selection of Appeal and Retrial Cases relating to Economic Disputes disposed by the Supreme People's Court (from 1993
until 1996X Vol. 2, edited by Economic Tribunal of the Supreme People's Court, China University of Politics and Law
Publication 1997, and
Selection of Cases disposed by the People's Court, Civil Cases Collection 1992 - 1999, Vol. 1, 2 and 3, edited by the
Research Institute of China Law Application of the Supreme People's Court, China Judiciary Publication, 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 109^

Table 3. 11 Category-wise filed and disposed/dismissed Cases and the Duration in the
High People's Courts
Type / Months <3 3-6 6-9 9-12 12-15 15-18 18-21 21-24 24-30 30-36 >36 Total

m* m m m m m m m m m m No.

Sales 2 20 4 2 2 0 0 0 0 0 0 30

Construction 0 6 3 1 0 0 0 0 0 1 0 11

Credit/Loan 2 9 4 2 1 0 0 0 0 1 1 20

Agreement

Guarantee 2 1 7 1 0 0 0 0 0 0 0 11

Contract

Agent 0 0 0 1 3 0 0 0 1 0 0 5

Agreement

Real Estate 1 2 1 2 2 0 0 0 0 0 0 8

Financial 0 1 2 0 1 0 1 1 0 2 8

Leasing

Foreign 1 0 2 1 3 1 0 0 0 0 0 8

Exchange &

Portfolio

Other Disputes 0 1 1 3 1 0 0 0 0 0 0 6

Total No. 8 40 24 13 13 1 0 1 2 2 3 107 1


* m represents "months". Source: compiled from Case Books edited by the Supreme People's Court.

Among 107 cases, 30 cases were related to sales contracts with dispute values ranging from 1
million to 10 million Yuan (most of them are around 2 million to 4 million Yuan); 11 cases
were related to construction projects with dispute values ranging from 5 million to 10 million
Yuan; 20 cases were relevant to disputes from Credit / Loan agreements with dispute values
over 2 million Yuan, and most of mem exceeded 7 million Yuan; 11 cases are relevant to
guarantee contracts between firms and banks and had comparatively higher dispute values;
the highest dispute value exceeds 20 billion Yuan; 5 cases were related to agent agreements
between parties and another 8 cases were related to real estate disputes; furthermore, 8 cases
110 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

are relevant to financial leasing, foreign exchange & portfolio; the remaining 6 cases concern
other economic issues.

(b) Time Taken to Dispose/Dismiss the Cases


As to the duration of disposition in the High Courts, among 107 cases, 8 cases were disposed
within 3 months, 40 were disposed in 3 - 6 months, 24 cases were disposed within 6 - 9
months, 13 cases were disposed within 9-12 months, 13 cases were disposed within 1 2 - 1 5
months and the duration of the disposition of the remaining 9 cases exceeded 15 months.
Thus, it is evident that only 48 cases, accounting for 44.86% (of the 107 samples) were
disposed within the time limit of 6 months as regulated by the law. 55.14% of the cases did
not have disposal within the time limit. This can be explained that due to the complexity of
cases and high dispute value, the parties needed more time in pretrial preparation and fact
finding; further, judges and involved parties are more carefully engaged in the cases.

(c) Average Time of Disposition


Based on the statistical figures from the 107 filed cases and the sum of the time consumed for
each filing, it is easy to calculate the resulting average duration. The average time of
disposition of 107 cases was 10.63 months.296

(2) An Anatomy of Workload in the High Court


Take one High Court as an example, there are 322 personnel in this High Court but many of
the judges are not responsible for judgments. They are involved primarily in administrative
activity. In this court, 88 officials are involved in court administration, accounting for
25.1%297 of the total number of personnel in the court. The High People's Court is
responsible for civil trial cases, which have a strong impact within its territory of
jurisdiction.298 Judges travel very often to different regions in the province to supervise
judicial work and review some big cases in the province. The court has the highest

296
The sum of time consumed for these 107 cases is 1137.26 months; 1137.26 months divided by 107 equals to 10.63
months.
297
In the previous investigation in the lower courts, administrative officials accounts around 50% of the total personnel. In
fact, the ratio in the high courts will be higher, since the high courts set up more departments man the lower courts.
298
Art. 20 of Civil Procedure Code.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 1U_

jurisdiction on appellate cases within the province. In the year of 2000, civil/economic cases
filed in this High Court amounted to 1376.299

(3) Findings
According to Table 3.11, 44.86% of the cases under investigation were disposed within the
time limit of 6 months as specified by the Civil procedure Code for cases disposed in the first
instance; 55.14% of the cases were not disposed within the time limit. This is due to the
reason that the trial and appeal cases filed in the court are much more complicated in
application of law, or have a high dispute value.
The average duration of disposition is 10.63 months for 107 cases filed in the High Courts.
This indicates that many dispositions exceeded the time limit regulated by Civil Procedure
Code and delays are inevitable.
Additionally, delays are also due to the current case management system of the court and lack
of supervision. As the court for administration and supervision, the High Courts spend much
of their time in supervising the judicial work of the lower courts within their territorial
jurisdiction and sometimes ignore the regulation on time limit in the jurisdiction of their own
cases.300

d) The Supreme People's Court

(1) The Function of the Supreme Court


(a) Interpretation of Law
The Supreme Court enjoys the highest discretion in jurisdiction and its judgment on cases is
final and binding to all parties. Moreover, the interpretation of the Supreme Court in laws and
regulations and its conclusions on cases have a strong influence on the judiciary, the role of
the Supreme Court is therefore of great importance to legal development.
The number of judges in the Supreme Court differs in each country.301 In most countries, the

299
The high court spends substantial time injudicial supervision, for instance, among 1376 cases, 311 cases are retrial cases.
300
The impression is concluded from discussions and interviews with some judges and lawyers.
301
For example, in Germany it consists of 10 judges in the Supreme Court (Bundesgerichtshof); in Netherlands it consists of
26 judges in the Supreme Court; in the US the Supreme Court has 9 judges; in Swiss there are 30 judges in the Supreme
Court and in Denmark there are 25 judges in the Supreme Court. The judges in the Supreme Court are not all professionals,
the may also come from prosecutors, law professors and senior lawyers.
112 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

process of selection and nomination of judges in the Supreme Court is complicated. Judges of

the Supreme Court usually enjoy high social status and prestige. For example, in Japan, the

Supreme Court consists of 15 judges, among whom 5 are professionals; the others are

selected from prosecutors, law professors and senior lawyers. In Japan, the Judicial

Conference enjoys the highest discretion in judicial interpretation, judicial review and also

serves as the highest jurisdiction on big and complicated cases; furthermore, the Judicial

Conference enjoys the highest discretion injudicial administration.

In China the Supreme Court has a total number of about 300 personnel but only slightly more

than 50 judges are engaged in judgment activities. One of the main tasks of the Supreme

People's Court is to interpret current laws and regulations. As the Chinese legal system is still

under progressive construction, there are many gaps to be filled in laws and there exists

different understandings of laws in different regions, thus, to unify the legal system and

extend guidance to the local courts, every year the Supreme People's Court issues more than

300 interpretations, attempting to improve the uniform understanding and application of the

law.302

(b) Judicial Supervision

According to Art. 177 of the Civil Procedure Code, the Supreme People's Court has the

discretion to review court orders/decrees made by the lower courts and has the jurisdiction to

retry the cases or order the lower courts to conduct the retrial procedures and review the

cases.

The Supreme Court has jurisdiction both on trial cases as well as in appellate cases,303

furthermore, it can also review cases filed in the lower courts.304 Cases filed in the Supreme

People's Court305 normally have national influence, or have a big dispute value. Due to the

complexity of cases, it would be no surprise to see that 70% of the cases have disposed more

302
Fu, Yu Lin, The Principle of Structuring the Judicial Hierarchy, in: China Social Science, Vol. 4, 2002, p. 96. The
interpretation of law by the Supreme People's Court is helpful to unify the application of law, but in fact it does not solve the
problem of different understanding of law by the lower courts, lawyers and the public in general completely, since most of
the interpretations are based on the reports and questions from the lower courts, while the interpreter - the Trial Committee
of the Supreme People's Court, does not participate in the trial of the cases and the interpretations made by them with respect
to some cases are still abstract, and these interpretations need to be interpreted again.
303
Art. 21, Civil Procedure Code.
304
Art. 177, Civil Procedure Code.
303
So far there is no trial cases (Civil Cases) filed accepted by the Supreme Court. Civil cases filed in the Supreme Court
are appeal cases and retrial cases.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 113

than 4timesuntil they were finally brought to the Supreme Court for final jurisdiction.306

(2) The Duration of Disposition in the Supreme People's Court


So far there is no original filing of civil case in the Supreme People's Court, though the Civil
Procedure Code allows such. All the civil cases disposed by the Supreme People's Court are
appeal cases from the High Courts or retrial cases from the lower courts. The study of
duration in the Supreme People's court is based on 107 cases, which were mentioned
previously. These 107 cases were original filings in the High Courts and were brought to the
Supreme People's Court for appeal or retrial after the first trial. It is therefore very easy to see
the total duration of cases filed originally in the High Courts and further appeals in the
Supreme People's Court.

(a) Filed and Disposed/Dismissed Civil Cases Categorized


Table 3.12 reveals that most of the 107 civil cases filed for appeal in the Supreme People's
Court are economic issues in nature, as already indicated. Most of the civil cases filed in the
Supreme People's Court concern disputes arising from sales contracts, construction projects,
credit / loan contracts between firms and banks, guarantee contracts, principal-agent contracts,
real estate, foreign exchange, portfolio and property, etc.307

In these 107 samples, 25 of the judgments made by the High Courts were canceled or
reversed; 7 of them are partly revised; 66 of them (accounting for 61.68%) remained
unchanged; 1 appeal was withdrawn by the party and 8 of them were settled through
mediation by the Supreme People's Court. The higher percentage of unchanged jurisdiction in
the higher courts reflects a more accurate application of law in the higher level of jurisdiction.
The dispute values of these cases are large compared with those trial cases filed in the lower
regional courts. In the survey, the dispute value of most of these cases was above 3 million
Chinese Yuan; the highest dispute value was 20 million Chinese Yuan.
With respect to litigation cost, most of the cases cost more than 30,000 Yuan in each filing.
Some cases incurred high costs when the case involved various fees like court fees, lawyer's

306
Sun, Bo Sheng, Analysis of Retrial Cases, People's Court Publication, 1999, p. 23.
307
See Cases Book edited by the Supreme People's Court. Infra Footnote 308.
114 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

fee, and fees for security of title and execution etc.

Table 3. 12 Category-wise filed and disposed/dismissed Cases and the Duration in the
Supreme People's Courts
Type / <3 3-6 6-9 9-12 12-15 15-18 18-21 21-24 24-30 30-36 >36 Total

Months m* m m m m m m m m m m No.

Sales 6 11 3 7 2 0 0 1 0 0 0 30

Construction 1 3 1 1 1 0 2 0 1 0 1 11

Credit/Loan 7 3 5 1 1 0 1 1 0 0 1 20

Agreement

Guarantee 2 6 1 1 0 0 0 0 0 1 0 11

Contract

Agent 0 1 2 0 0 1 0 0 1 0 0 5

Agreement

Real Estate 0 5 1 1 0 1 0 0 0 0 0 8

Financial 0 1 3 1 0 1 0 0 2 0 0 8

Leasing

Foreign 1 5 1 0 0 1 0 0 0 0 0 8

Exchange &

Portfolio

Other 0 0 0 1 1 0 0 2 0 2 0 6

Disputes

Total No. 17 35 17 13 5 4 3 4 4 3 2 107


* m represents "months"
Source: compiledfromCase Books edited by the Supreme People's Court2

308
Selection of Appeal and Retrial Cases relating to Economic Disputes disposed by the Supreme People's Court (from
1993 until 1996X Vol. 2, edited by Economic Tribunal of the Supreme People's Court,China University of Politics and Law
Publication 1997, and
Selection of Cases disposed by the People's Court, Civil Cases Collection 1992 - 1999, Vol. 1, 2 and 3, edited by the
Research Institute of China Law Application of the Supreme People's Court, China Judiciary Publication, 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 115

(b) Time Taken to Dispose/Dismiss the Cases


Among 107 appeal cases settled by the Supreme People's Court, as indicated in Table 3.12,
17 cases were disposed within the time limit of 3 months as regulated by the Civil Procedure
Code for appeal cases; 35 cases were disposed within 3 - 6 months; 17 cases consumed 6 - 9
months; 13 cases were disposed within 9 - 1 2 months; 5 cases were settled within 1 2 - 1 5
months; all others were resolved in 15 months or more. From this empirical study, it was
found that only 17 cases, accounting for 15.89% of the total 107 sample cases, were settled
within the time limit (3 months for appeal cases), the rest (accounting for 74.11%) over ran
the time limit. Some cases took a very long time for disposition, for example, several cases
were settled after more than 2 years from filing.

(c) Average Time of Disposition Appeal Cases


The average time of disposition of the 107 cases in the phase of appeal, based on the statistics,
took 9.51 months309.
The average duration from original filing until settlement is the sum of average time
consumed in the High Court (10.63 months) and the Supreme Court (9.51 months), which
was 20.14 months.

(d) Average Duration of Retrial Cases


Comparatively, the time duration from disposition until final judgment made by the Supreme
People's Court under the supervision procedure, was too long.
Among 107 cases, 12 cases were under judicial supervision procedure by the Supreme
People's Court and were disposed as retrial cases.310 Table 3.13 briefly shows the statistics.

The sum of 1017.5 months for all the cases divided by 107 equals to 9.51 months.
Retrial cases has a stake of 20-25% of the caseload of appeal cases, see China Law Year Book, 1991-2000.
116 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts
Table 3.13 Time Consumption of Retrial Cases filed in the Supreme People's Court (12
cases from 107 appeal cases filed in the Supreme People's Court).
Month 0-3m* 3 - 6 m 6-9m 9-12m 12-15m 15-18m 18-24m >24m-

cases 0 1 2 0 0 3 0 6

Average time of disposition: 16.8 months

Total duration**from original filing in the local court until final settlement in the Supreme People's

Court: 38.85 months


* m is for 'month'
** The total duration includes the waiting time before the acceptance of retrial filing.

As revealed in Table 3.13, 6 cases exceed 24 months, 3 cases needed 15-18 months, 2 cases
consumed 5 - 8 months and 1 case took 4.5 months. Therefore, it may be concluded that it is
these small size cases that consumed the most time for disposition and affected the duration
of court.
The average duration of a retrial procedure took 16.8 months and the total duration from
original filing in the court of the first instance until final settlement in the Supreme People's
Court was 38.85 months.
This indicates that under supervision procedure, there may exist some defects in Civil
Procedure Code in which the parties and the courts can present evidence and new arguments
for retrial without limit on times of trial and time limit in disposition. The retrial procedure
can be repeated in the court and result in a heavy burden on the court. Delay in the Supreme
People's Court has much to do with the complexity of the cases and the generosity of the
retrial procedure, consequently, the appearances of the parties for hearings is also frequent;
according to statistics for retrial cases under jurisdiction in the Supreme People's Court, 70%
of the retrial cases were filed and disposed by the lower courts more than 4 times before the
cases were finally brought to the Supreme People's Court for final jurisdiction under the
supervision procedure.311
The law's delay not only proves that justice delayed is justice denied, but also it may imply
that improvements should be made on how to regulate retrial in respect of how new evidence

311
Some of the cases were even disposed more than 7 times before filing for retrial in the Supreme People's Court, see, Fu,
Yu Lin, The Principle of Structuring the Judicial Hierarchy: a comparative analysis, in: China Social Science, (4) 2002, p. 98,
Footnote 3.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 117

and fact-finding can be accepted as the reason for a retrial. In terms of litigation costs, due to
the impossibility of having a speedy redress, the parties not only pay a high amount of
litigation fee, but also lose many business opportunities due to the long duration of the court
procedure.

(4) An Anatomy of the Supreme People's Court Workload


There are around 300 personnel in the court and only around 50 judges are engaged in
judgment activities. The cases filed in the Supreme People's Court have increased quickly
over recent years. Currently, the Supreme Court disposes around 3,000 cases each year, the
number of filings are about two times the number of dispositions,312 this indicates that the
court is not able to solve all of the cases filed in the court, and delay is inevitable when cases
are pending and new filings are increasing. Furthermore, the Supreme Court deals with
around 10,000 claims made by post or by visits of individuals.313 The workload in the
Supreme People's Court is high, due to the fact that most of the people hope to utilize the
court as their last chance to realize justice, especially when inequality, corruption and
interference are frequent in local regions. To reduce the overload of cases, some suggest that
the cases filed in the Supreme Court should be 'filtered' by the lower courts based on a 3-tier
hierarchy in jurisdiction314, or by procedural reform, and through increasing the quality of
judgment in the lower courts.315

(5) Findings
The Supreme Court takes upon itself part of the function of legislature in the form of legal
interpretation in China.316 The Supreme Court serves mainly as an appellate court for
complicated cases or cases with large dispute values or those which are of great national
influence.

312
Ditto.
313
It is very common to sec from the newspaper that many people go to the Supreme People's Court or the People's
Congress in case they feel justice is miscarried. The large number of claims by personal appearance in the Supreme Court or
by post reflects the failure to deliver justice to the public by the local courts and many people see the Supreme Court as the
last defense of justice.
3,4
Fu, Yu Lin, The Principle of Structuring the Judicial Hierarchy, in China Social Science, (4) 2002, pp. 93-96.
315
Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, pp. 235-238.
316
The Constitution stipulates that the National People's Congress has the right to enact and interpret law. However, in
practice, the interpretation of law is made by the Supreme Court.
118 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Among the 107 appeal cases, only 17 cases (accounting for 15.89%) were settled within the
time limit of 3 months (for appeal cases).
The average time of disposition for appeal cases in the Supreme People's Court, based on the
sample study, was 9.51 months and the average duration of disposition from original filing
until settlement by the Supreme People's Court was 20.14 months (10.63 + 9.51).
It must be mentioned that the disposition of retrial cases took longer than necessary at each
level of jurisdiction. Likewise, in the Supreme People's Court, sample survey shows that it
needed 16.8 months on average to dispose the filing of retrial cases. The average total
duration of the cases from original filing in the court of the first instance until the final
judgment was made by the Supreme Court was 38.85 months. According to China Law
Yearbooks, 20-25% of the appeal cases were brought for retrial.317 Retrial cases represented
a small proportion of the total filings and dispositions. Most of the retrial cases were mainly
concentrated in the higher courts and only a small proportion of retrial cases were filed in the
lower courts.318 The empirical study indicated that retrial case consumed a longer time and
increased the overwhelming workload of the judges.

IV. Functioning of Court System: Assessment based on Interviews and Questionnaires

L Views of the Parties: Delay, Cost, and the Factors for Court Success

The parties' views on the functioning of the courts were gathered based on questionnaires,
mainly through interviews with 20 litigants and respondents in different cases. The purpose of
the questionnaire (questions shown in Part E of Questionnaire 1 - Appendix I) was to find out
the views of the parties with respect to the functioning of the court system, especially on the
issues of duration of the cases and the cost for litigation.
With respect to the duration of cases, according to the Civil Procedure Code (1991) and
Regulation on Strict Implementation of Time Limit in Jurisdiction (2000), the duration of
cases under trial in the court of the first instance shall be 6 months and 3 months in the

317
China Law Year Book, 1991-2000, supra note 287.
3,8
Supra note 286. In High People's Court of Hainan, retrial cases had a stake of 22.6% of the total caseload; In Haikou
Intermediate Court it had a stake of 8.2% and in District Court of Xinhuan, it was only 1.1%.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 119

appellate court, prolongation must strictly fulfill the relevant regulations.319 Most of those

interviewed were of the opinion that the duration of the court process was too long and there

were no objective criteria for granting adjournments. In appeal and retrial, the parties had to

wait for more than one month until the documents were delivered by the trial courts and

accepted by the appellate courts, despite the time limit of 15 days. The longer the duration of

the cases, the lesser the possibility for redress of grievances from the courts, as was the view

of the parties.

As to litigation fees, litigants complained that advance payment to the court could not be

recovered from the court when the debtor disappeared or went bankrupt. As a result the risk

for recovering the prepaid litigation fee is shifted to the litigant even when he/she wins the

case.320 Besides the litigation fee, which is based more or less on objective criteria, many

people complained that additional (implicit) costs were charged by the courts, based on

arbitrary criteria set by the courts. With respect to bribery, many admitted that they were

affected by the lawyers or the opposite parties to bribe the judges so as not to find himself in

a weak position in litigation.

The litigants viewed that the success of litigation may be gauged by the extent of

compensation settled in favor of litigants and the speed of the trial; further, litigation costs are

a great concern to the parties involved, a quicker and less expensive settlement is essential for

success.

Furthermore, law enforcement is regarded as an important element of court success, since the

court orders/decrees are executed by the courts, the functioning and competence of the courts

strongly affect the success of court remedy. Many viewed that the execution procedure is also

expensive. Some interviewed were of the opinion that the attitude of the executor is very

decisive for success of execution. If the executor acts passively, then it will be very difficult

to have the court orders enforced.

319
Before this Regulation was issued by the Supreme People's Court, the research department of the Supreme People's
Court conducted an investigation in Hcnan and Shangdong Province to assess whether the time limit as regulated in the Civil
Procedure Code (1991) is appropriate for law practice. In the investigation report conducted in 1999 with subject on:
Enhancing Efficiency, Solving the Problem of Exceeding Time Limit, it is found mat many cases were delayed, backlog has
been a serious problem in many courts under investigation. Thus, the Supreme People's Court issued this Regulation to urge
all the courts in China to deal with the problem of court delay.
320
According to current regulation, litigant must pay litigation fee in advance to the court at the time of filing. In case of
winning the case by the litigant, the prepaid litigation fee can only be recovered from the debtor. The risk is shifted to the
litigant.
120 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Z Views of the Judges (Interviews)

The views of the judges were gathered through interviews by face-to-face discussions. Most

of the interviews were conducted in the District Court of Hull, Xiamen City and Intermediate

People's Court of Xiamen, some interviews were done in Beijing with judges in the Supreme

People's Court.

Many judges are in favor of more determination in budget supply and judicial independence.

They thought that only when the courts do not have to rely on the budget from the local

governments, can the influence of the local administration be reduced. Judicial independence

requires a reform of the court system with respect to budget autonomy, personnel

management, case management etc. As for the Trial Committee,321 it is still very

controversial for many judges: most of them regard the Trial Committee as an obstacle to

judicial independence since it has too great power in jurisdiction and judges have to follow

the opinions of the Trial committee. Delay is more unlikely when the Trial Committee affects

its power for review cases. To some judges, the Trial Committee is a guarantee of quality of

judiciary and helps to avoid abuse of power by individual judges, especially when the judges

of the lower courts (district courts and intermediate courts) are not competent to deal with

complicated cases or are not sure how to apply the law, the Trial Committee is a shield

against corruption and miscarriage of justice.322

With respect to human capital, most of the judges, especially judges in the higher courts,

viewed that the current legal system is not efficient and the quality of the judgment,

especially in the court of first instance, is not satisfied since most of the cases are filed and

disposed by the district courts and the intermediate courts and that the human capital in these

courts is very decisive to the outcome of the judgment. If the courts of the lower level cannot

attract talented judges, the functioning of the judiciary and judicial product cannot be

guaranteed.

321
The Trial Committee, according to People's Court Organization Act, is established in each court to discuss the
complicated cases filed in the court. In practice, the Trial Committee often interferes into the decision of the collegial panel
or the judges in the name of judicial supervision. For more details about the function and problems of the Trial Committee,
see Chapter 2, II 3 c) and IV, 3 a) and III. 1 of Part II in Chapter 3.
322
In an interview with the president of one intermediate court. Compare: Thinking on the Reform of Civil Jurisdiction, in:
Contemporary Law, 4 th ed. 2000. Judge Huang, Song You of the Supreme People's Court shares this view.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 121

Judges always face a dilemma injudicial activity. When a case is filed, the presiding judge is

likely to be influenced by all of the social connections in his surroundings. As the Chinese

society is traditionally "a net consisting of numerous private connections", thus "Chinese

ethics and law, are elastic in procedure according to relationship between the person and

'himself."323 Judges in the Chinese local courts encounter heavy pressure from the "net",

consisting of a relationship of family, friends and hierarchies.324 According to an

investigation made of the 5 judicial organs,325 it was found that "there exists the influence

of personal contacts and relationship in 87% of criminal cases and 94% of civil cases, and it

is becoming more and more serious".326

Meanwhile, many judges admit that the litigation cost is high for the parties involved.

Besides the litigation fee, the courts charges additional costs to the parties. The reason for this

is widely known to all; the courts have a budget shortage and need more income to cover the

expenses of the courts. Some admit that the parties very often bribe the judges so as to

influence the outcome. However, it is difficult to know whether the judges interviewed

engaged in corruption; although it is a matter of fact that corruption is one of the major

obstacles of accessibility of justice. Some high ranking officials in the courts expressed that

they normally do not give their phone number to acquaintances so as to avoid approach by

these people. It was admitted that many people use their relations and personal contact to

approach judges if litigation is brought to the court. Judges say they find it very difficult to

balance the interest of the parties, especially when both of the parties have relations and

personal contacts in the government administration.

Many judges felt that a lawyer's involvement is not necessary unless it is a complicated case.

323
Fei, Xiao Tong, Native Soil of China, 1* ed. In 1947, San Lian Book Publication, 1985, p. 34.
324
Such pressure is very obvious in China. In the traditional ethics, family plays a very important roll among the general
people. According to traditional Chinese ethical standards and its corresponding attitudes and norms, family interest is
decisive to the people in dealing with various conflicts in daily life. For example, when a person becomes a judge (or other
type of officialX his relatives and friends may have such expectation: in the litigation, the judge should distinguish the
relatives from the others and shall not ignore their close relationship. Such expectation put the judge into a dilemma situation:
he may risk himself making unfair judgment and violating the law if he gives up his neutrality - as the judges in China
always do. The legal system in China is under modernization but the legal culture is still to a large extent very traditional,
therefore, if the judge ignores the relationship, it may cause tension between the judge and his family, relatives, friends and
hierarchies. Empirical study shows that a harmonious relationship with the family members is very important to the
psychological health of a judge and the law enforcement is very much affected by his psychological health. From this
viewpoint, it is suggested that institutional arrangement shall be made to avoid judges to work in the locals where they were
borne. See Xia, Yong, Toward An Age of Rights: A Perspective of the Civil Rights Developments in China, revised
edition,China University of Politics and Law Publication, 2000, pp. 234,235.
323
These 5 institutions are: the court, the procuratorate, the police, the judicial administration and the congress.
326
See the People's Court Daily, 07.03.1994.
122 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Lawyers sometimes cheat the innocent party by adding additional charges to the cost of the

innocent parties or by just making use of procedural rights and by delaying the cases

technically. Lawyers sometimes are also corrupted. In one case the lawyer was aware of what

the outcome would be but cheated the party he represented by saying that he needed 50,000

Yuan to bribe the judge to win the case, when in actuality he took the 50,000 Yuan for

himself327

Judges interviewed had different opinions on the issue of court delay. First is the concern the

calculation of duration. To some judges, court delay is not serious when the duration in the

court of the first instance and the appellate court is calculated separately. Due to the time

bound program, most of the filings can be disposed by the end of the year; however, some

judges opined that delay is severe based on the total duration, calculated from filing until the

case is finally settled either in the trial court or the appellate court, and further taking the time

of enforcement of court order into consideration. Secondly, on law's delay, judges have

different views on delay in notification and delivery of writ. Postal delay, adjournments

because of absences of respondents and delay in case of the involvement of the Trial

Committee, account for the major reasons. Take the postal delay as an example, one judge in

the Supreme People's Court commented that the time to post a file from the trial court to

appellate court is 'blind' point, which is a major reason of court delay. But in practice, this

'blind' period is not calculated in statistics.328 Third, the intervention by government

administration, as viewed by the judges, is one of the main obstacles causing court delay,

especially in the enforcement of law, court orders are very difficult to enforce when a case

has to do with local interests. In the traditional hierarchical structure, the higher rank judges

have greater discretion.

As to the high settlement ratio, many judges confirmed that they have to follow the

prescribed time limit as regulated by the Civil Procedure Code and the Regulation on Strict

Implementation of Time Limit in Jurisdiction (2000). Further, a time bound program329 of

327
See People's Judiciary, (2) 2001, p. 36.
328
Interview with judge Wang, Yan Bin of the Supreme People's Court on 27.01.2003.
329
The time bound program is good in the sense that it establishes a clear task in disposition of cases. But it also causes
some problems in disposition, for example, to realize the time bound program in which settlement ratio is given, judges tend
to settle the cases by mediation, or asking the litigants to withdraw the cases by the end of the year or even settle the cases by
careless trial . This leads to some adverse effects in judiciary, namely, low quality of judgment and miscarriage of justice.
The time bound program therefore shall include a workable time limit for the judges.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 123

settlement has been established in each court, both for disposition and law enforcement.

3. Views of Lawyers

In China, law was established and first recognized as a profession after the reform and open

policy at the end of 1970s. The engagement of a lawyer in litigation has greatly improved

procedural reform.

In interviews with 10 lawyers, most of them opined that current procedural reform is strongly

related to the lawyers. From the standpoint of procedural justice, fair judgment can only be

guaranteed by a just procedure. The modem procedure law stresses the equality of the parties,

respect for legal rights, private autonomy, remedy of legal rights and protection of human

rights, etc., these procedural activities need the help of lawyers. Due to the short history of

the legal profession and limited engagement of lawyers in civil process in China, civil

procedure law contains many irrationalities,330 thus, lawyers' engagement is viewed to be

very important in protecting the procedural rights of the parties.

Lawyers not only play an important role in providing professional legal counsel to the parties,

but also assistance to the judges, since many judges in China do not have professional

university education, their knowledge and understanding of law is limited; whereas lawyers

are professionals who normally have a law degree and are skilled in the application of law.

Furthermore, in legal debate, the arguments and suggestions from lawyers may remedy the

procedural defects or fill legal gaps. However, some lawyers said many judges were hostile

towards lawyers in some cases (The main reason for this is that judges felt the existence of

lawyers was a hurdle to their self-interest, especially in specific cases, when conclusion had

already been made by the Trial Committee by internal discussions or orders are given by the

local administration).

On the issue of procedure justice, all of the interviewed lawyers held the view that the

procedure is very often violated. For example, the lower courts very often ask for instruction

from the higher courts when they have problems in dealing with cases, the opinions of the

higher courts are normally adopted by the lower courts in the judgment. For the litigants, an

Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 507.
124 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

appeal in the higher court would mean the same result because the higher court has already

made a prejudgment on the case.

Most of them denied that lawyers acted as middleman for bribery of the judges. They

admitted that there may have been some cases in which lawyers bribed the judges in order to

win, but they said these few people do not represent the whole. Most of lawyers are

self-disciplined and abide by professional ethics.

With respect to delay, all the interviewed lawyers rejected the idea that engagement of

lawyers in the court process leads to court delay. The current problem of backlog and court

delay, as referred to by them, was attributed to the functioning of legal system in respect of

organization of the courts, human capital, legal tradition & culture, intervention, budget, case

management, etc. The removal of court delay needs to begin with a reform of the legal

system, not only the symptoms.

As for cost, lawyers had different opinions from those of the general public. They viewed that

it was a good idea that, under the current reform, the advocate fee was decided by the market

and based on mutual agreement. They felt that the Regulation on Advocate Fees and

Standards of Advocate Fees of 1990331 could not adapt to the current market economy and

the legal profession.

4. Assessment based on the Questionnaire"2 - The Major Factors Affecting Court Delay
and the Effect of Regulation on Time Limif33

The reasons affecting the duration and efficiency of the courts are complicated. According to

the questionnaire filled out and returned by 70 persons (including judges, assistant judges,

clerks and court police) in the courts of Jiangsu Province and Chongqing City, the main

results can be summarized as follows:

With respect to the process of litigation, 50% of them opinied that delivery of settlement is

the main reason affecting court delay; 36% of them indicated pretrial preparation; 21% of

them chose the hearing phase; 10% regard the meeting and discussion of collegia! panel

331
Regulation on Advocate Fee and Standards of Advocate Fee were promulgated in 1990 by the Ministry of Judiciary,
Ministry of Finance and State Bureau for Price of Goods and Services.
333
See attached Questionnaire 2 / Appendix II.
333
The Supreme People's Court: Regulation on Strict Implementation of Time Limit, 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 125

affected the duration of cases; only 7 % of them chose Tiling' as a reason for affecting court
delay.
As to the internal and organizational factors, 46% of them opinioned that the human capital
of the court affect the duration of cases; 41% regard that budget, case management, court
facilities and personnel autonomy etc. affect duration of cases; 31% regarded that waiting for
instruction from higher ranking officials or higher courts consume more time in the making
of judgment; 24% identified "waiting for the decision of a collegial panel and a Trial
Committee"; and only 1% chose "signing of legal documents by the presiding judge or
president of the court".
For external reasons, 57% voted for "Complexity of Cases", which indicated a need for time
for collecting evidences and authentication; 46% indicated "Intervention of Administrative
Bodies"; 44% chose "Difficulty in Delivery of Legal Documents"; 43% identified "Delay in
Providing Evidences by the Parties" and only 10% chose "Bad Cooperation from Lawyers".
The problem of court delay is more serious in civil cases compared with criminal and
administrative cases. The problem in enforcement of court orders/decrees, as viewed the
judges, was that 90% of the court delay are concerning cases of law enforcement. This
reveals that the enforcement of judgments is considered to be the toughest task in judiciary in
China. The reasons are rooted not only in the courts with respect to human capital, budget,
court facilities, case management etc., but also relating to the external social and economic
environment, as well as the lagged legislature.
Table 3.14 presents the causes of delay and the percentage based on the survey through the
questionnaire.

Table 3.14 Causes of Court Delay (based on multiple choice)


Items Percentage
Delay in Exchange of Evidences 27.2%
Excessive Consumption of Time in Audit, Assessment and Appraisal 55%
Difficulty in Delivery of Writ and other Legal Documents 40% \
Delay in Hand Over File 4.5%
Waiting for Instruction 20.4%
Cases Concerning Group Action 5.4%
Difficulty in Application of Law 7.3%
126 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

a) Arbitrariness and Subjectivity of Judges


Many of judges lack responsibility in judgments and have a dim view towards the time limit.
Judges often speed up their court proceedings in order to settle the cases by the end of the
year so as to have a better settlement ratio and fewer records of 'exceeding the time limit'
because their bonuses, promotion opportunities are closely related to their 'performance'.
Some simply apply for prolongation when the time limit is up or revert simple procedure into
normal procedure just to avoid exceeding the time limit of 3 months in a simple procedure.
Some judges do not prepare and write the writ after the meeting of the collegial panel or do
not send the writ in time to the parties.

The low quality of judges also leads to court delay. Judges act very cautiously when they are
not confident in the application of law due to their limited legal knowledge and experiences;
consequently they cannot make judgments in time and appearances of the parties / hearings
will increase. Decisions are not made during the hearing but very often through "close door
discussions", which consume much more time. One example in from this investigation shows
one case concerning a dispute over a leasing contract of an apartment was finally last settled
after 6 hearings and 8 collective discussions by the collegial panel. The total duration of this
case took 8 months; in fact, such an easy case could have been concluded within several days.

b) Heavy Workload
Compared with other countries, the average number of cases disposed by the judges in China
is low and the number of judges is high, compared to China's population. For example, in
1998, there were 170,000 judges among 280,000 court personnel and the number of cases
settled by the courts was 5,864,274.334 The average number of cases disposed by each judges
was 34.5, which is low compared with American or German judges.335 But, this low average
does not mean that the workload of the courts is not heavy. On the one hand, though the
number of judges in the courts is great, many judges actually do not engage in judgment of
cases. Further, the proportion of judges is too great while the personnel for assistance work is
334
China Law Year Book, 1999.
335
The average number of cases disposed by each American judge is between 300 -400 per year and the German judge
around 700 cases per year.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 127

not enough;336 consequently, judges have to spend time in simple work, which normally
should be done by court clerks and assistants. From an efficiency point of view, it is waste of
judicial resources for judges not to be able to concentrate on disposition of cases. On the
other hand, the increase in case load needs more court staff to strengthen the force in
judgment. On the contrary, many courts, especially the lower courts, have to reduce the
number of personnel under the reform program337 Many excellent judges quit the positions
in the courts and joined the law firms as the legal profession provides a high income
opportunity to them. Take the courts in Chongqing City as an example, in the year of 2000
the case load was about 230,000 cases, but the number of judges and assistant judges and
clerks was reduced from 5751 to 5045. To reduce backlog and settle the number of cases
assigned338 to them, some judges concentrated on simple cases first and left the complicated
cases for later. Some judges even worked overtime to avoid exceeding time limit.
An overload of cases is one of the main reasons of court delay. The reform should increase
the proportion of assistant judges and clerks in the courts by assigning those unqualified
judges to these new positions.339 According to the caseload, it has been suggested that 30,000
judges are needed to dispose the current caseload.340 The number of judges should be 20-30
(highly qualified judges) in the Supreme People's Court, 10-20 judges in each High Court,
15-20 judges in each Intermediate Court and around 5 judges in each District Court.341 The
aim is to separate the administration from jurisdiction of cases. The remaining highly
qualified judges would be competent for disposition of cases when the simple administrative
matters are left to the assistants and clerks.342

c) The Difficulty and Complexity of Cases


As China is in a transitional economy, new conflicts happen every day and some are beyond
the current capability of the law. Thus, court delay is inevitable when it is difficult to apply

336
More than 50% of the personnel are judges. See the research report of Foshang Intermediate Court the Research of
Assistant Judge and the Number of Judges. In: People's Judiciary (8) 2002, p. 38
337
Courts at all levels shall reduce 10% of the personnel, according to the reform plan in 2000.
338
In the court, each judge has a certain amount of cases to complete. Whether he can settle the assigned cases or not,
affects his remuneration and future promotion opportunity.
339
The proportion of judges in the Chinese courts is 61% (170,000/280,000), whereas in the US the proportion in 1984 is
5.9% and in Taiwan the proportion is 15.6%.
340
He, Bin, Restructuring the Mechanism of Dispute Resolution, in: Peking University Law Journal, Vol. 14, No.l (2002), p.
341
Ditto.
342
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 422.
128 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

the law to some cases.


The investigation shows that for some cases judges have to spend more time to discuss or
wait for instruction from the Trial Committee or higher court; these cases share 20.4% of the
total cases, which exceed the time limit. In many civil and commercial disputes, the problem
has much to do with financial trust and security; some cases need experts' opinions and
advice from special organizations and therefore need longer time.
Moreover, the cases concerning group litigation, which may affect social stability or sharpen
the conflict, share 5.4% of the cases which exceed the time limit. For example, in the
corporate reform of state-owned firms, disputes arising from bankruptcy catch the attention of
the society and government; the development of real estate in China creates new conflicts not
only in property rights, but also coupled with tort cases in environmental protection, the right
for healthcare, etc. Although the legislature in China is speeding up to tackle these problems,
mainly in the form of legal interpretation,343 judges still find it difficult to apply the law in
specific cases. Further, in these cases concerning employment and social stability, local
governments frequently intervene in the judgment. Due to these factors, judges find it
difficult to apply the law or make proper decision.

d) The Administrative and Functioning Problems of the Courts


The problems with respect to judicial administration and its functioning can be summarized
as follows:

(1) Administrative Problem


Judicial efficiency has much to do with the management and organization of the court system
in China The administrative and managerial pattern of the courts is difficult to change in
short run. Internally, judges have to report cases to higher officials or higher hierarchies and
lack arbitrariness in the judgment of cases; externally, the personnel, budgets and facilities of
the courts are dependent on the local governments and the ruling party. As a result, local
governments and the ruling party can easily intervene in cases. In some cases, due to the

343
Legal interpretation is normally made by the Supreme people's Court. Many interpretations are made when there are
legal questions from lower courts asking for instructions on how to solve the complicated cases. In China, around 300 legal
interpretations are issued by the Supreme People's Court each year. See Fu, Yu Lin, The Principle of Structuring the Judicial
Hierarchy: a comparative analysis, in: China Social Science, (4) 2002, p. 96.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 129

existence of localism or the outside interest of certain government sectors, local governments
and the ruling party, even the supervisory body frequently interferes with the courts or
requests the courts postpone trial or suspend the execution of court orders/decrees. Besides,
court delay may occur when the judges have to report to the representatives of the local
people's congress who execute the power of supervision in certain cases.344 As China hasn't
enacted supervision laws, there are no systematic or legal procedure regarding the supervision
of the People's Congress and the Judiciary. In case of discrepancy in views, the courts have to
follow the opinion of the People's Congress; thus, the supervision of representatives in
specific cases may affect judicial independence and judicial authority.345
According to this investigation, 7.3% of court delay in the samples was related to the above
mentioned factors. Taking one particular case as an example, it is difficult to find applicable
law in a tort case relating to personal reputation, which has a social impact. A case is filed
on 12. June of 2000, as a result of 3 public hearings, 7 meetings and discussions of the
collegial panel, 7 reports to the higher court for instructions; it was finally settled on
18.05.2001. The duration of this tort case took almost one year.

(2) Functioning Problem


The regulation on Meetings of the Collegial Panels and Trial Committees is not effective
since the contents for discussion in the meeting are too broad and consume a lot of the judges
time; besides, delay often occurs when the cases pile up for discussion by the Trial
Committee or when the cases are not able to be arranged for discussion in time, due to a
conflict in the schedule of the Trial Committee.

(3) Effectiveness of Supervision on Time Limit


Although the Regulation on Strict Implementation of Time Limit (2000) was promulgated by
the Supreme People's Court in 2000 it still lacks strong sanction in case of violation of the
time limit. Many courts have poor case flow management. The regulation has only a

344
As a socialist country, the Constitution stipulates that the power of the state belongs to the people, and the National
People's Congress and its local People's Congress represent the people to enforce power of the state. The National People's
Congress is the highest power organ of the state and the local People's Congress represents the power organ of the local; the
Constitution stipulates that the National People's Congress has the discretion to select the administration and the judiciary,
the procuratorate and has the power to supervise their activities.
345
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, pp. 454,455.
130 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

short-term effect in reducing backlogs and delays. In the long run, reduction of backlogs and
delays depends on further judicial reform.

(4) Delay in Transfer of Files


Some court delays are caused by a reassignment of work and training programs of the judges.
As a result the files are not transferred to the colleagues in time and it takes more time when
new judges are assigned to take over the cases. Such cases share 4.5% of the total court delay.
Among its total 18 cases in delay, one court under investigation had 6 delayed cases relating
to the problem in transfer of files.

e) The Impact of Economic Development on Judicial Efficiency


One factor must be addressed that the level of local economic development has also great
impact on the speed of judgment: first, in west part of China where many provinces are
underdeveloped, many counties of these provinces are poor and have a deficit every fiscal
year. Although there are some subsidies for local budgets, the sum is still too small for the
courts. In some counties, even the salaries and allowances are not able to be guaranteed.
Second, backward office facilities cannot meet the functioning of the courts. Due to the lack
of sufficient budget to purchase the necessary equipment, the efficiency of the courts is
heavily affected. For example, many county courts do not have a computer network to save a
vast volume of information. Third, delivery of writ takes too much time and affects the duly
settlement of the cases. In some poor regions, transportation is not yet developed;
consequently, delivery of writ by courier or by post takes a long time. Moreover, some parties
cannot provide accurate addresses of the other parties; some small companies disappeared
and nobody was available, in such a situation, the case is regarded as settled only 60 days
after the public notification is issued. In the sample survey, 40% of delays were caused by
late delivery of writ. Fourth, the legal attitudes of the parties and the participation of lawyers
also have an impact on court delay. Normally, in poor regions, due to the educational level
and social environment, people do not have the concept of law in their minds. In case of
litigation, they do not exactly know the correct procedure for litigation, and delays very often
happen when evidence is lost and other legal procedures are not properly done. The
engagement of a lawyer involves a high cost to people with a low income. Only 45.2% of
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 131

cases from the sample survey were engaged by lawyers.

f) Ambiguity of Law and Lag of Legislation

(1) Lack of Definite Criteria in Audit, Assessment, and Appraisal Procedure


One of the main reasons for court delay in civil cases is due to ambiguous criteria with
respect to the procedure of audit, assessment, and appraisal of the dispute objects in the cases
concerning disputes of quality of construction & architecture, real estate and property rights,
etc. According to the Civil Procedure Code, a third party shall be appointed by the courts to
proceed with audit, assessment and appraisal, but very often the parties cannot agree on the
selection of the audit firm, the materials submitted for auditing, and relevant fees arising
thereof. Such disagreement leads to more consumption of time in the civil process; moreover,
some items from the disputes are difficult to be appraised. The conclusion from experts
differs from each one another. Consequently it is difficult for the court to draw an acceptable
conclusion within a reasonable amount of time.
In the sample survey, 55% of the cases were delayed due to excessive time consumption in
auditing, assessment and appraisal. For example, among 6 civil cases, which exceeded the
time limit, 5 cases were delayed due to the above mentioned reason.

(2) Faultiness of Regulation on Evidence


The survey revealed that 27.2% of the cases were delayed because of excessive consumption
of time in collecting evidence by the parties, investigation of evidence by the courts and
exchange of evidence by the parties. Although Civil Procedure Code regulates the obligation
to provide evidence by the parties in reasonable time,346 courts are still flexible on this issue.
In practice, considering the weak litigation ability of the public in general, most of the courts
accept new evidence any time during the litigation; the consequence is that the cases takes
more appearances and hearing of the parties and causes court delay.

346
According to Art. 110 of Civil Procedure Code, the parties shall present evidence to the courts at the time of filing,
otherwise the court can specify a deadline for presenting the evidence according to the nature of the evidence and estimated
time needed. In case of failure to provide the evidence within the time limit, prolongation can be allowed only subject to
reasonable application. Art. 76 of Regulation on Strict Implementation of Time Limit interprets 'reasonable time' as 30 days.
132 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

(3) Application of Simple Procedure


According to Art. 142 of Civil Procedure Code, simple procedure shall be applied in District
Courts relating to civil cases with clear facts and small dispute values. The aim of simple
procedure is to facilitate filing347 and trial by the courts in quick time348 and with low cost.
In practice, the application of simple procedure does not reach the goal of legislature, as the
cases applicable for simple procedure must be "clear in facts, rights and obligations, and the
dispute value shall be not great".349 The narrow definition excludes most cases even when
they are not difficult these cases have to follow the normal procedure. Meanwhile, simple
procedure is not applicable in the appellate courts, thus all appeal cases are centralized in
collegial panels, which is also be responsible for the trial cases. It has been a bottleneck for
judicial efficiency and leads to congestion of cases in the appellate courts.

(4) The Instruction Practice


In some cases, due to the vacancy of law in the transitional economy, judges sometimes
cannot find applicable law and have to ask higher courts for instruction on how to apply the
law in specific cases, and even on cognizance of the evidence and facts. The procedure for
such instruction costs more time for settlement of the cases.
Besides, to avoid responsibility for wrong judgment, many judges depend on the instruction
procedure as a shield against possible mistakes in application of law.350

(5) No Time Limit on Evidence in Appeal


There is no strict regulation on time limit under the current regulations on evidence. The
parties can ask for a hearing when new evidence is found. Parties may make use of new
evidence to postpone judgment.

(6) No Regulation on Time Limit for Delivery of Legal Documents


From the date of settlement of the trial court until the date of filing in the appellate court,
there is no regulation of time limit, and it is regarded as one major reason for court delay.351
347
Written form is not necessary in some circumstances.
348
The case shall be settled within 3 month according to Art. 146 of Civil Procedure Code (1991).
349
Art. 142, Civil Procedure Code (1991).
330
Due to the feet mat many judges do not have formal legal education and training, their understanding of law is limited.
Asking for instruction from higher court is often used to avoid mistakes in application of law or shift responsibility.
331
Wang, Li Wen and Wang, Yan Bin, Understanding and Application of Regulation on Strict Implementation of Time Limit,
People's Judiciary, (1) 2000, p. 11.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 133

Civil Procedure Code and its relevant regulations do not have a specified time limit in respect
of sending the file between trial court and appellate court and transfer of cases in case of
change of place of jurisdiction. In statistics from the courts, the time for delivery of files is
not considered. In reality, the total duration is longer than that reflected in the statistics.

(7) Improper Procedural Reform in Pretrial and Hearing


Civil Procedure Code does not specify how much time is allotted for each phase of the trial.
In fact, much of the time is consumed before all the evidence and files are ready to be
presented for hearing. But in the current reform, the pretrial procedure is lengthy and
complicated. Consequently, the low efficiency of the pretrial procedure leads to excessive
amounts of time spent in litigation.

V. Findings based on the Empirical Study

/. Sample Study in the District Court and the Intermediate Court

Through an empirical study based on 287 cased disposed by the District Court, Huli, Xiamen
and 213 cases disposed by the Intermediate Court of Xiamen, it was found that duration of
cases in the District Court is more or less within the time limit of 6 months as regulated by
the Civil Procedure Code. The average duration of the 287 cases was 56.5 days for cases
disposed under simple procedure and 155 days in regular order. Dispute values of these cases
were comparatively small, mostly ranging from 5,000 - 50,000 Yuan; the facts were clear and
evident in most of the cases. But many disputes could have been solved in shorter time if
simple procedure were more frequently applied in the jurisdiction.
With respect to the problem of court delay in intermediate court, 213 civil trial cases filed in
the Intermediate Court of Xiamen were surveyed. It is very common that time limit is
violated in this court, no matter if they are trial cases or appellate cases. The average time
consumption of 213 cases was 8.7 months (261 days) for trial cases filed in the Intermediate
Court of Xiamen (as court of the first instance).
Furthermore, 63 appeal cases filed in the Intermediate Court of Xiamen were selected to
survey the total duration of cases from original filing in the court of the first instance until the
134 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

final settlement. In the court of first instance, the average duration was 145 days, the

average duration in the appellate court was 217.6 days, and the total duration from original

filing in the court of the first instance until court orders/decrees were made by the appellate

court was 416.5 days.

Z Sample Study in the High Court and the Supreme People's Court

The study of the duration of the High people's Court and the Supreme Court is based on 107

civil trial cases collected from the publications of the Supreme People's Court. The average

duration of the High Courts was 10.63 months based on the 107 civil trial cases filed in the

High Courts, whereas the duration of the Supreme People's Court was 9.51 months.

In brief, from empirical study, it was found that duration in the District Court was more or

less within the time limit as stipulated in the Civil Procedure Code. However, the time limit

normally cannot be honored in the appellate court. The higher the judicial hierarchy is, the

longer the duration will be.

3. Court Delay in respect of Retrial Cases

Court delay is obvious concerning cases under judicial supervision (retrial cases). The

caseload of retrial cases is heavier in higher jurisdiction.352 20-25% of the appeal cases were

further filed for retrial under judicial supervision.353 Though retrial cases doe not represent a

large proportion in total filings and dispositions,354 it is obvious that it consumes an

overwhelming amount of the judge's time and exhausts the parties. It is this small size case

that has spread adverse effects to the general public and results in a loss of confidence of the

people.

Among 63 appeal cases, 16 cases were under retrial procedure. The duration of these retrial

cases were 375.5 days or 12.5 months from the date of applied for retrial until final

judgments was made, and 711.5 days or 23.71 months calculating from when court orders

352
Supra note 287. See Zhang, Ai Zhen, Some Suggestions on Restructuring the Judicial Supervision in China, in: People's
Judiciary, p. 19.
353
China Law Year Book, 1991-2000.
354
Supra note 286.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 135

were made by the appellate court until final settlements were made by the retrial court. The
average time consumption from original filing until the final settlement exceeded 2 years.
Among the 107 samples in which 12 cases were under retrial procedure, it was also found
that the duration of the retrial procedure is long. It took 16.8 months on average to dispose
the cases by the Supreme Court under retrial procedure. The total duration of these cases also
exceeded 2 years on average.
There are some reasons behind the long duration: these cases are complicated and consume a
lot of time for evidence-collecting; in retrial procedure, judges focus more on substantive
justice355 and ignore procedural regulations on time limit; furthermore, the parties try to
make use of the retrial procedure to revise the court orders/decrees made by trial court or
appellate court. The parties can apply retrial procedure within 2 years after the original court
orders/decrees and there are no restrictions on times of disposition.

4, The Interviews

There are some implications which can be taken from the assessment based on the interviews
and questionnaires. First, court delay seems not to be a big problem considering the high
settlement ratio and the duration found in the empirical study. This has to do with the time
bound program established in the courts. The time bound program established in the courts is
useful in creating incentives and pressure on the judges for a speedy settlement and
enhancing judicial efficiency, but the time bound program also causes some problems in
disposition, for example, judges are inclined to settle cases through mediation, or to ask the
litigants to withdraw the cases at the end of the year or settled by a speedy and even careless
trial. In some courts, judges treat the filings in October as the filings for the next year. Judges
tend to settle the cases at the end of the year so as to realize the high settlement ratio as
established in the time bound program. This leads to some adverse effects in the judiciary,
namely, low quality of judgment and miscarriage of justice.356 A time bound program

353
Similarly, the Italian Civil Procedure Law stresses on the substantive justice. Art. 360 allows the parties involved to
apply for substantive review whenever there is a substantive mistake in judgment Consequently, delay is serious in Italy.
The long duration of civil procedure in Italy is very often complained by its member states in EU.
356
According to the statistics of the Supreme People's Court, cases settled at the end of the year have higher probability to
be retried than the cases settled in the previous 3 seasons. This indicates that the speedy trial at the end of the year may result
in violating procedural and substantive justice. See People's Judiciary, (4) 2000.
136 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

therefore must establish workable time limits for the judges. Second, the parties are of the

opinion that the explicit and implicit cost of litigation is too much for them. They viewed that

speedy trial is critical for litigation. Third, lawyers' engagement is considered to be important

in protecting the procedural right of the parties and the sound development of the judiciary in

China, despite the complaint about lawyer's improper conduct in some cases.

5. Some Conclusions

Some conclusions can be drawn from the empirical study based on primary and secondary

data, interviews and questionnaire-oriented interviews.

Generally speaking, court delay seemed not to be a big problem in China as far as the results

of the empirical work are concerned. There are no serious delays in the district courts and the

intermediate court, and this coincided with the results drawn from the study based on the

secondary data concerning total filings and dispositions in China The result is important to

the study of duration of the courts since the district courts (including magistrate courts) and

intermediate courts dispose 80 -90 % of the civil cases. Some reasons should be mentioned:

the district courts apply simple procedure in dispositions since most of the cases are simple

and easy in fact-finding and application of law. The less complex these cases, the more time

is saved for disposition. Further, the Regulation on Strict Implementation of Time Limit in

Jurisdiction (2000) has had a strong impact on the judges in the lower courts.

Court delay is still a problem concerning cases filed in the High Courts and the Supreme

People's Court, although the cases filed in these courts share around 10% of the total filings

in the country. The duration of the court is longer when the hierarchy of the court is higher

due to the complication and difficulty of the cases filed in the higher courts.

Court delay is obvious when cases are disposed under retrial procedure. This can be

contributed to no restriction in times of trial and the time limit for retrial cases and a long

tradition of Chinese legal culture in which people are more concerned about substantive

justice and ignore the time limit in procedure.

Due to the different levels in economic development, efficiency of the courts in the eastern

regions is higher than those in western regions due to the advantage in budget, court facilities,
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 137

human capital, management and law enforcement etc.


Furthermore, the empirical study also implies that long duration exists in the execution of
court orders/decrees and a high rate of exceeding time limit in enforcement of court
orders/decrees. Chapter 5 is thus an endeavor to address this problem by presenting the
problems and reasons behind that.
138 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Part II: Critical Evaluation of Functioning of the Court System

- Restructuring the Court System

I. Introduction

The reduction of court delay cannot be achieved simply by an increase of judges and time
available for judgment. An acute reform is necessary with respect to improvement of human
capital, reform of the procedure, reducing litigation cost and improving the accessibility of
the courts, together with the availability of legal aid to the poor. Meanwhile, the ADR
mechanism shall be reinforced in jurisdiction to reduce the caseload of the courts.
Part II will provide a critical evaluation of the functioning of the courts based on the
empirical study undertaken in Part I. The evaluation will focus on how to restructure the court
system in China and how judicial reform, starting from procedural reform, can remove its
obstacles and improve 'access to justice' by reducing costs and court delay.

II. Critical Assessment of Court Efficiency

Justice and efficiency are the goals of the judiciary. Low judicial efficiency is similar to
corruption, which damages the people's confidence and trust in the judicial system357
In China, there is an external impetus and growing expectation from the general public for an
efficient judiciary. Such desire not only comes from the bottom, but also from the top. As
addressed by the President of the Supreme People's Court, 'The object of the People's Court
in the new century is justice and efficiency"358 The reform is aimed at reducing court delay
and improving the efficiency of the courts, as well as the enhancement of substantive and
procedural justice.
The assessment of the efficiency of the courts in China shall take the following criterion into

Zhang, Wen Xian, The Jurisprudence,China University of Politics and Law Publication, 1993, p. 273.
Xiao, Yang, in an interview during National People's Congress 2001, in: (China) Legal Daily, 09.03.2001.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 139

consideration: the settlement ratio, the quality of settlement and the related human capital,

and the average disposition of cases etc.359

1. Critics on Settlement Ratio and Duration of the Courts

Settlement ratio is the main criteria for assessing judicial efficiency to see how many cases

are disposed or dismissed within the time limit. Time limit, in civil process, is stressed by the

Supreme People's Court. In its Regulation on Strict Implementation of Time Limit (2000), it

requires the courts to abide by the regulation on time limit and reduce court congestion and

court delay. 360 The previous study in this chapter based on the secondary data indicates a

high settlement ratio of 90% - 95%.361 Courts reduced court delay dramatically after the

Regulation on Strict Implementation of Time Limit (2000) was promulgated by the Supreme

People's Court in 2000. According to statistics, the settlement ratio for civil cases was around

92.90% in the year 2000, among which 79.61% of the cases were disposed by the application

of simple procedure and settled within 3 months. 18.43% of the cases were settled by regular

order within 6 months 1.96% of the cases were disposed in more than 6 months. By

comparison, the survey based on secondary and primary data indicates that the duration of

courts is almost as good as the duration in Germany.362

It is important to define the concept of settlement. In China, a case is seen as 'settled' when a

court decision/order is made by the respective court. The Supreme People's Court adopts

such criteria in its annual statistics; consequently the settlement ratio is reflected as being

high from the statistics made by the Supreme People's Court. Tlie ratio will be lower if a case

is considered as 'settled', only when a final court decision/order is made.

However, it must be pointed out that such a settlement ratio does not reveal the real picture in

China In interviews with judges in the Supreme People's Court and the lower courts, it was

359
Judicial efficiency can be measured quantitatively by the resource consumed in judiciary, namely the number of judges
assigned for jurisdiction and the time consumed for disposition of the cases. It can also be measured by the output of the
judicial work, in concrete it means the quantity of the disputes resolved by the courts. In this context, judicial efficiency shall
be based on the assessment of settlement ratio, total dispositions and the duration of the courts.
360
The Supreme People's Court Regulation on Strict Implementation of Time Limit, 2000 Art. 12.
According to this regulation, the normal time limit for the normal proceedings in the first instance is 6 months; it can be
extended for another 6 months under special circumstances in which it is necessary to be prolonged, in total it shall not
exceed 13 months. The regulation has corrected the shortcomings in the old version, in which there is no limitation of the
longest duration of the proceedings. Consequently, the efficiency of the courts is improved.
361
As indicated in China Law Year Book, 1990 - 2000.
362
See the previous empirical study made to the District Court of Huli and the Intermediate Court of Xiamen.
140 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

admitted by some judges that there existed many improper practices of the courts in order to

seek a high settlement ratio. For example, each court has a time bound program for settlement

ratios and judges should fulfill the task. To satisfy the time bound program, many judges treat

the filings in October of that year as new filings for the coming year so that there will be no

backlog in the courts; in many cases, especially at the end of the year, the litigants are asked

to postpone the filings until the coming year, withdraw the filings, or settle the cases quickly

by court-arranged mediation.363 In the statistics, data related to disposition were even altered

to meet the time bound settlement ratio. Therefore, based on these interviews, it was implied

that the legal system does not work properly and even may sacrifice the interest of the parties

by pursuing high settlement ratio at the cost of procedural and substantive justice.

In this context, the efficiency justification of the Chinese legal system cannot be merely based

on the settlement ratio,364 rather on the inclusion of additional factors such as average

disposition and quality of judgment.

Though there has been an obvious enhancement of court efficiency since the 1980's when the

legal system was established, it is still low compared to some Western countries. For example,

in 1989 there were around 120,000 judges and 3,182,194 cases settled. The average

disposition was 26.5 cases per judge; in 1998 the number of judges increased to more than

170,000 and there were 5,864,274 cases settled. The average disposition was 34.5 cases per

person.365 In 1998, the number of judges increased by 41.67% and the number of cases

increased by 84.28% compared with the number in 1989; in the meantime the disposition has

also increased 30.19%. It reveals that judicial efficiency has been improved. However, the

average disposition by each judge is still very low compared with judges in the US and

Germany. For instance, in 1997 each judge in China settled 21 cases366 on average per year,

such a figure is only one fortieth of that of American judges, or one fiftieth of German judges,

363
In an interview with judges in the Supreme People's Court, judges doubt the authenticity of the statistics provided by the
lower courts. In interviews with one judge who is responsible for statistics in the district court and interviews with lawyers,
they all confirmed such practice in jurisdiction.
364
Some judges in the lower courts and the Supreme People's Court drew conclusion based on the high settlement ratio as
calculated from the China Law Yearbooks and regarded that the efficiency was high in the courts. I think it is too simple to
make such conclusion given the fact that the statistics does not reveal the real world scenario and high cost (error cost, moral
cost and miscarriage of justice) may incur because of speedy and rough dispositions. Compare: Huang, Song You, An
Analysis of Judicial Efficiency, in: People's Judiciary, (11) 2001, p. 21.
365
See Table 3.4.
366
Statistics of disposed/dismissed cases in 1997, in: People's Judiciary, (4) 1998, p. 13.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 141

or 1% of Macao judges.367

The above analysis and comparison reveal that the courts shall focus on disposition and shall

enhance the human capital and assign more qualified judges in jurisdiction while reducing the

number of judges in administrative matters within the courts. The pros and cons of a speedy

disposal shall be considered; a time bound program in the courts shall consider some

measures like granting reasonable adjournments so as to frame a more effective criteria in

respect to court delay in order to avoid fraudulent behavior in statistics and speedy disposal at

the cost of procedural justice and substantive justice.

Z Enhancement of Efficiency by Improving Human Capital

In the current Chinese legal system, a mixed and variety of regulations have affected the

uniform rule of law and judicial efficiency, both the complexity of law and the lag of

legislation may cause court delays. The lack of human capital in the legal system makes it

more difficult to properly understand the law and the application of the law. On the one hand,

many judges lack the necessary legal education and professional training. Still, other

qualified judges are occupied by administrative matters and have little engagement in

jurisdiction. In some courts, only around 50% of the judges are responsible for disposition of

cases. All of these factors shown in the previous empirical study have affected the judicial

efficiency.

Although the number of judges is big in China, for example, in 2002 the number was round

270,000, it must be admitted that many judges do not have legal education before admission

and short term legal training simply cannot help.368 In fact, many judges are not competent or

qualified enough to deal with complicated disputes. On the other side, many judges who have

legal education and legal training hold administrative positions in the courts and do not

engage very much in jurisdiction. The efficiency of the courts will be considerably enhanced

by improving human capital, optimal assignment of jurisdiction, and judicial administration

within the courts. Further, the problem of the low average of disposition in Chinese courts

cannot simply be concluded being attributed to low efficiency in every court, as the previous

Li, Xiao Bin, How to Improve Judicial Efficiency, in: People's Judiciary, (10)1998, p. 17.
Compare V. 2 in Chapter 2.
142 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

study indicates that the workload, budget and human capital differ from court to court and
region to region. Some courts may have higher efficiency and some may have lower
efficiency, but the average efficiency is still low.

III. Court Delay and the Trial Committee

1. The Trial Committee - 'Super Collegia! Panel' and its Problems

According to the regulation of People's Court Organization Act, all courts shall establish a
Trial Committee.369 The main goals of the Trial Committee are to summarize experience in
jurisdiction, discuss and decide complicated and big cases and discuss other important issues
relating to the judiciary.
In practice, the Trial Committee has too much discretion in adjudication. The Trial
Committee often instructs the tribunals to make judgment according to their views. In many
cases the Trial Committee even overturns the decisions made by the tribunals, although the
scope of work of the Trial Committee is defined by the Supreme People's Court and each
local courts370 according to the social and economic situation in each region. The trial
Committee has excessive interference in tribunals.
According to statistics collected by the High Court of one province,371 the Trial Committee
of the court held 138 meetings (138 days) to make decisions on 1,011 cases, which is more
than 1/3 of the total cases disposed by this court. The average cases adjudicated by the Trial
Committee in each year are more or less 1/3 of the total cases disposed by the court. In
another words, in every three cases, one is disposed by the Trial Committee rather than by the
tribunals. To ensure that these cases can be disposed as quickly as possible, the court decides

369
The establishment of the Trial Committee is based on the following laws and regulations: Art. 10 of the People's Court
Organization Act, 1954, stipulates that "all courts shall establish a Trial Committee. The main task of the Trial Committee is
to summarize judicial experience, discuss big or complicated cases and other issues relating to judicial work"; Art. 11 of the
People's Court Organization Act, revised in 1983 and 1986, regulates that "all courts shall establish a Trial Committee,
which shall be based on collective democracy. The main task of the Trial Committee is to summarize judicial experience,
discuss big or complicated cases and other issues relating to judicial work". However, it is interesting that the current Civil
Procedure Code (1991) has deleted the clause relating to the discretion of the Trial Committee over "trial and instruction on
cases"; moreover, the Administrative Procedure Code (1989) keeps silent on whether the Trial Committee has the discretion
to make decisions on cases. From the legislation point of view, the law intends to reduce the influence of the Trial
Committee in trial activities.
370
For example: Regulation on the Work of the Trial Committee of the Supreme People's Court, issued on 02.03.1999;
Interpretation to Some Problems in Enforcing Civil Procedure Code, issued on 29.06.1999.
371
See Zhang, Wei Ping, Review on Judicial Reform, Vol. 3, China Judiciary Publication, p. 52.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 143

that the Trial Committee will spend 2 working days as regular time for discussion and

decision on cases; this means that 40% of the working time in 5 working days shall be spent

on discussing the cases. As the members of the Trial Committee consist of president of the

court, presiding judges of the court, the heaviest amount of work is shifted from the tribunals

to the Trial Committee. Many judges complained that the backlog of the cases has much to do

with the time spent in the Trial Committee. Sometimes, the meeting was canceled due to

absence of some members at the meeting;372 in some cases, decisions were made even when

the number of members was not enough to hold the meeting simply because the tribunals

were urged to make a quick decision on cases within the time limit. The Trial Committee is

therefore called the "super collegial panel".373

Further, the division of work between the tribunals and the Trial Committee is ambiguous.

According to the law, the Trial Committee is only responsible for resolving problems

concerning complicated cases or cases with big dispute value. In fact, many cases are

complicated in nature; these cases are submitted to the Trial Committee only because the

judges in the tribunals are not sure about some points. It causes a repeat of the trial and such

a trial consumes additional time.

2. Pros and Cons of the Trial Committee

The existence of the Trial Committee is an issue of dispute in China. There are different

views on whether or not to keep the Trial Committee in the courts. Some argue that the Trial

Committee shall remain in the court because the Trial Committee can provide guidance and

supervision in trial and help to solve problems in the application of law, especially when the

substantive law and procedure law are not fully realized in China Meanwhile the Trial

Committee can provide better remedy and justice to the parties by taking advantage of

collective decisions when the judges are not competent enough in terms of knowledge, legal

training, and experience. Furthermore, the Trial Committee can be used as a shield against

local intervention and used as an excuse by some judges not to follow the instructions of the

According to the regulation, at least half of the members shall be present in the meeting.
See Wang, Li Min, Research on Judicial Reform, China Law Press, 2000, pp. 195 - 200.
144 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

local administration in the name of the Trial Committee.374 In one investigation, it was found

that the existence of the Trial Committee helps to improve the quality of the judgment and

curb corruption and inequality in judgment. Bribery is more difficult since each member of

the Trial Committee has a deterrence effect on the others.375 The existence of the Trial

Committee is therefore rational when taking the legal environment into consideration.

But many others opposed the existence of the Trial Committee in the courts. As the tribunals

have to report the cases to the Trial Committee, the duration the cases is extended simply

because most of the members of the Trial Committee do not have a basic idea of the cases

and it takes time for them to read through the files, evidence, etc. Further, the members of the

Trial Committee often have bias that follow the opinion of the president of the court,

therefore the goals of the Trial Committee often deviate from what is written on paper. The

Trial Committee often abuses its discretion and interferes with cases. The trial Committee is

therefore seen as an obstacle ofjustice and should be abolished.376

3. Comment

Despite the different opinions on whether to keep or abolish the Trial Committee, in the long

run, it is in the interest of the judiciary to abolish the Trial Committee to enhance judicial

efficiency and accommodate judicial reform based on several considerations. First, regarding

the court decisions made by the Trial Committee, the People's Court Organization Act

specifies that the main function of the Trial Committee is to discuss cases rather than make

decisions on cases. Both the Civil Procedure Code and the Administrative Procedure Code do

not specify the function of the Trial Committee and keep a distance from such legislation of

law. Therefore, trial of cases by the Trial Committee is not specified by the Civil Procedure

374
Chen, Guang Zhong, Directives of Criminal Law of UN and the Criminal law in China, China Law Press, 1999, p. 93.
375
Su, Li, An Investigation and Re-thinking of the Trial Committee in the Lower Courts, in Beijing University Review, 2 nd
Collection, Vol. 1, pp. 361-363. The author argued that the quality of judges in the lower courts in general could not be
improved considerably in the short run due to the lack of professional knowledge and training. Furthermore, individual judge
is vulnerable to resist the interference from the administration and the higher courts, therefore the collective decision made
by the Trial Committee could be a good means to resist the pressure from the outside interference.
376
Zuo, Wei Min, Comment on the Existence of Trial Committee, in: South Weekly, on 12. 03. 1999.
Judge Huang, Song You of the Supreme Court holds a modest view of the Trial Committee. It is regarded that the Trial
Committee still has great value with respect to judicial supervision and it serves as the last guarantee of justice, despite
heavy criticism. It is argued that the Trial Committee is competent to make correct judgment based on the analysis of
evidence and fact-finding, therefore it is not urgent to abolish the Trial Committee in the short run, but to improve it until the
time is ripe for abolishment See Huang, Song You, Progress and Transition: Thinking on the Reform of Civil Jurisdiction, in:
Contemporary Law, 4 th ed., 2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 145

Law. Second, in Art. 11 of the People's Court Organization Act, it is specified that the
decision of the Trial Committee should be based on "Collective Democracy". In practice,
decision-making is based on majority rule. There is no specific regulation on the procedure of
the Trial Committee and no liability in the event of violation of the law by its members. Third,
the Trial Committee is not responsible for its mistakes. Some discussions are based on the
oral report of the presiding judges and it is difficult for the Trial Committee to make an
accurate judgment in such a short time. A detailed review of cases would consume more time
and lead to court delay. Fourth, the discussion by the Trial Committee is not a public hearing,
but a closed door discussion. In such circumstances, the procedural right of the parties is
violated. Fifth, there is no time limit and limit on times of trial for the cases brought to the
Trial Committee. Though there is no specific statistics about the duration of cases decided by
the Trial Committee, court delay is more likely to happen when the case is under review by
the Trial Committee.
As the original purpose of the Trial Committee is to discuss complicated cases, which cannot
be solved by incompetent judges, it is therefore essential to the success of the reform of the
Trial Committee that the qualifications and competence of the judges be enhanced.

IV. The Application of Simple Procedure

Often, it is a waste of judicial resources when simple cases cost the time and energy of the
judges and the parties. Take as an example, a passenger filed in the court against the Railway
Administration of Zhengzhou City since he was charged 0.3 Yuan for using the toilet in the
waiting room.377 The case was brought to the appellate court by the litigant after the trial in
the court of the first instance, though 0.3 Yuan was paid back to the litigant, the judicial cost
for the case burdened by the state was too great. It is therefore not economic wise or efficient
to have 2-tier judicial hierarchies for such simple cases, likewise it is meaningless to address
justice when the social cost is high for such simple cases. To solve the dispute more quickly,
it would be very practical to establish summary courts. For instance, in the rural area where
many simple cases are uncomplicated and have small dispute value, it would be not necessary

Quote from: Newspaper Abstract, 3* edition, 27.09.2001


146 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

to have an appeal procedure for these cases; instead, summary courts or tribunals would be

much more efficient in dealing with these kinds of cases.

According to the statistics, the personnel in the lower courts, namely the District

Court/County Courts and the Intermediate Courts, share more than 80% of the total personnel

of the courts in China and 80% - 90% of the civil cases are disposed by the lower courts,

namely, the District Court/County Courts and the Intermediate Courts. The efficiency of the

lower courts consequently has a great impact on the functioning of the court system in China.

According to current practice, cases filed in the District Court shall apply simple procedure

first. The cases will be turned into normal procedure only when the judges find out that more

time is needed to apply the law for these cases. However, no summary (or small claims) court

has been established in the Chinese courts. It has been proven in many countries that small

claim court is very efficient in providing speedy redressal and saving litigation cost for the

parties. In many western countries, small claims courts are established to deal with piling of

cases and to have a speedy trial. Some countries have enacted procedure law with respect to

small claim cases. In America, the trial court can settle small claim case with only one judge

after obtaining consent from the parties. Some judges are specially selected to deal with the

cases filed in the small claim court. In Germany, there is a special and detailed stipulation

about the application of simple procedure and small claims cases in its civil procedure law

(ZPO). These regulations have the same common goal: to have speedy redressal.378

1. Problems Concerning Simple Procedure

The lower courts in China face the conflict of the availability of judges and increasing cases.

In some courts, judges are overloaded by cases and thus many cases are not able to be

resolved in time.379 The duration of many cases is too long and therefore causing backlog

and delay. Some cases are settled after a repeat hearing, whereas few cases are settled by just

one hearing. Some easy cases are disposed in regular order and waste time and judicial

378
In Germany, after the enactment of "Gesetz zur Vereinfachung und Beschleunigung gerichtlicher Verfahren" in 1st July
1977, cases are disposed very quickly. Under the new law, the case should be disposed within one sitting of the court; the
judgment should be made within three weeks and the compensation is possible before final verdict of the case
(Erleichterungen in Fallen vorlftufiger Vollstreckbarkeit). Compare Rottleuthner, H. and Rottleuthner-Luther, M., Die Dauer
von Gerichtsverfahren: Evaluation derZPO Vereinfachungsnovelle, Nomos Verlagsgesellschaft, 1. Auf., Baden-Baden, 1990,
pp. 248 ff.
Bo, Min, Small Claims Tribunal: a new practice of justice and efficiency, in: People's Judiciary, l rt ed. 2002, p. 39.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 147

resource.

Concerning cases filed in the District Courts and County Courts, 70% -80% of the cases are

disputes involving small claims, family matters, physical injuries and/or tort, there is no need

to apply regular order for the adjudication of these cases. In the sample study and through

reading of the files of the District Court in Huli, Xiamen, it was found that the dispute value

of 49.80% of the cases was below 50,000 Yuan, among which 35% of the cases were

concerning credit and debt. The facts of most of these cases were clear and it was easy to

apply the law. Meanwhile, due to the clear facts and small claim, few of theses cases engaged

lawyers. These cases could have been settled quickly if simple procedure had been applied.

It is meaningful for the lower courts in China to establish small claim courts to deal with the

increase in cases. Due to the rough definition of simple procedure, in practice, some problems

exist in the application of simple procedure: first, judges are both responsible for complicated

and easy cases. Judges apply simple procedure for all cases in the beginning and may turn

simple procedure into normal procedure when the cases are found to be complicated.380 In

some cases, some judges turn it into normal procedure just to avoid exceeding the time limit

of 3 months for simple procedure. Secondly, due to the reason that there is no separation of

simple and normal procedure, some cases were under simple procedure at the beginning but

normal procedure was applied in the hearing stage. The lack of standards for applying the

simple procedure and normal procedure causes disorder in the jurisdiction of cases in the

lower courts. On one hand, many simple cases cannot be solved in time because simple

procedure is not applied. On the other hand, complicated cases cannot be adjudicated

properly with care, due to no division of the work amongst judges. If a small claims court or a

small claims tribunal can be established in the District Court, it would provide speedy

settlement of cases and avoid the waste of judicial finances.

2. The Prospect of Small Claims Tribunal in China

To reduce the duration of cases and litigation costs, many countries apply simple procedure in

380
In the interview, some judges admitted that simple procedure should be first applied. In fact, many cases were turned into
normal procedure because the cases could not be settled within 3 months as established for the cases under simple procedure,
thus, the cases were tried in regular order which allowed a time limit of 6 months.
148 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

disposition of cases. In the UK, US, and Japan, more than 90% of the cases filed in the

District Court are disposed by simple procedure. In China, the courts have already realized

the use of a small claims tribunal or small claims court can speed up the civil process and

enhance accessibility of the courts.

One example based on an empirical study381 indicated that the establishment of a small

claims tribunal has improved efficiency of the courts by increasing settlements and reducing

the duration of litigation. In the South District Court of Qingdao, one tribunal was established

to specialize in disposition of small claims cases. From Oct. 2000 until Sept. 2001, the

tribunal consisting of 4 judges disposed 1,313 small claims cases 1,247 were settled in a short

time and the settlement ratio was 95%. In this tribunal, each judge disposed 28.3 cases on

average per month and the number of dispositions was 50% more than the other tribunals in

the court. The duration, from filing until settlement, was obviously shortened to an average

duration of 38 days.382

Among the 1,247 settled cases, 349 cases (28%) were settled through mediation, 187 cases

(15%) were withdrawn, 167 cases (13%) were dismissed by the tribunal, and 118 cases (9.5%)

were settled during hearing. 90% of the cases were disposed by one hearing in the court.

Moreover, only 64 cases were appealed and only 2 of court decisions were revised by the

Intermediate Court of Qingdao. The appellate rate was only around 5%.383

Another example offers strength and support for the establishment of a small claims court or

tribunal in the District Courts in China The District Court of Huangpu, Shanghai, selected 6

judges from its 20 judges in the civil tribunals for disposing small claims cases. In 1999, 6

judges disposed 80% of the total cases filed in court by applying simple procedure; each

judge disposed 74.7 cases on average per month. The establishment of small claims tribunal,

as referred to in the summary report of the court, relieves the workload of the court and thus

the collegial panel can concentrate on the complicated cases according to normal procedure

and dispose these cases with high quality. ' 384

The establishment of a small claims tribunal is a good reform measures in the District Court.

381
Bo, Min, Small Claims Tribunal: a new practice of justice and efficiency, in: People's Judiciary, (1) 2002, p. 39 ff.
382
Ditto.
383
Ditto.
384
He, Bin, Restructuring the Mechanism of Dispute Resolution, in: Peking University Law Journal, Vol. 14, No. 1 (2002),
pp.15-16.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 149

For the court, it separates easy cases from complicated and improves efficiency. The parties
view that the small claims tribunal can resolve disputes quickly in an easy way. Many of them
are relieved from traveling, absences from work, time consumption, etc. It also reduces the
litigation cost and saves time for the parties; on the other hand, it makes it easier to get access
to the court.

V. Restructuring Supervision Procedure: Reducing Court Delay

1. The Aim ofRetrial Procedure

The supervision procedure is defined in Art. 177-188 of Civil Procedure Code. The purpose
of the supervision procedure is to guarantee substantive justice. However, in practice, the
functioning of the supervision procedure deviates from the spirit of legislature contributing
much to the defects in the design of the procedure. The current supervision procedure is
based on the belief that all errors shall be corrected based on the facts; thus, court
orders/decrees shall be corrected whenever a mistake is found. The supervision procedure is
to provide justice and equality to the parties through retrial procedure. The Chinese procedure
law, including the civil procedure code, criminal procedure code, and the administrative
procedure code, has set up a retrial procedure to correct mistakes contained in the court
orders/decrees even when they are already binding and effective to the parties. However, the
retrial procedure faces strong critics due to the problems of lengthy process and the high cost
incurred.

Z The Major Problems in the Retrial Procedure

Under the supervision procedure, the parties may apply for retrial under the supervision
procedure if they are not content with the courts' orders/decrees.385 The court can initiate the
retrial procedure if it finds that the court orders/decrees might be wrong in fact finding and

385
Art. 179 of Civil Procedure Code; "The court shall retrial the case if the application by the parties fulfills the followings:
i. new evidence, which is sufficient to overturn the original court order or decision; ii. the major evidence is not sufficient to
affirm the fact-finding, as well as supporting the court order or decision; iii. wrong application of law in the original court
order or decision; iv. violation of procedure by the People's Court, which may lead to a unlawful court order or decision; v.
corruption, miscarriage ofjustice by the judges during disposition of the case".
150 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

application of law.386 Furthermore, the procuratorate can challenge the court orders/decrees
and require the court to retry the case.387 There are no specific regulations on time limit of
evidence and times of disposition in retrial.388 The finality of law and the legal relationship
between the parties have again an unstable status.389 The society should minimize the
litigation cost and error cost caused by mistakes in judgments.390 The overstressing of
error-correction is not efficient from an economic point of view.

a) Retrial Procedure and Court Delay


The duration of the retrial procedure is much longer than that of normal procedure in the
court of the first instance and the appellate court. According to the empirical study, the
duration of the cases from the original court orders/decisions until the final jurisdiction made
by the retrial court is more than 2-3 years in the Intermediate Court and in the Supreme
People's Court. Retrial procedure can be repeated again and again.
To the parties, it means he/she can apply for retrial within 2 years if he/she thinks that the
judgment or decree contained errors or mistakes, or when he/she has new evidence. Under
such a broad definition for retrial, the parties can easily have access to retrial. Furthermore,
for economic reasons, the parties may save costs by applying for retrial rather than appealing
to a higher court since no litigation fee is required in a retrial procedure. Some parties may
have another chance to win the case even when the probability of reversing the decision
might be small when the case is brought back to the same court because the reason for retrial
is not strong enough to overrule the original judgment. In some circumstances, the parties
may even exhaust the other side by making use of the retrial procedure, namely, some

386
Art. 177 of Civil Procedure Code: "The president of the court in all levels shall present the cases to the Trial Committee
to decide whether to retry the cases when mistakes are found in the effective court orders or decisions. The Supreme Court
can retry the cases by itself, or can authorize the local court to retry the cases, when mistakes are found in the effective court
orders or decisions made by the local courts".
387
Art. 185 of Civil Procedure Code: "The Supreme People's Procuratorate can challenge the court orders or decisions made
by all of the courts; the higher procuratorate can challenge the court orders or decisions made by the lower courts and appeal
for retrial according to the supervision procedure, if: i) new evidence is sufficient to overturn the original court order or
decision; ii) the original major evidence is not sufficient to affirm the facts and make the court order or decision; iii) wrong
application of law in the original court order or decision; iv. Violation of procedure by the People's Court, which may lead to
the legitimacy of the court order or decision; v) corruption, miscarriage of justice by the judges during disposition of the
case".
388
One case was even under retrial for 12 times. See Zhang, Ai Zhen, Some Suggestions on Restructuring the Judicial
Supervision in China, in: People's Judiciary (10) 2001, p. 21.
389
Sheng, De Yong, Some Problems in the Reform of Judicial Supervision, in: People's Judiciary (8)2001, p. 16.
390
Posner, A. Richard, Economic Analysis of Law, Little Brown Publication, Boston, Toronto, 1992, 4 * ed. pp. 550 - 552;
also see Posner, A. Richard, An Economic Approach to Legal Procedure and Judicial Administration, in: Journal of Legal
studies 2 (1973), pp. 396 - 400.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 151

evidence is hidden during the initial trials and are presented for application for retrial at a
later time. In general, the procedure becomes too lengthy and exhausting to the other parties.
For the courts, it means that they should correct the errors or mistakes in the judgment at any
time when mistakes are found. The retrial procedure is thus referred to as the 'final
jurisdiction that never ends', as court orders/decisions are in a state of uncertainty for long
periods of time and thefinalityof the law is questioned.391
Besides, most of the courts treat retrial cases as new cases (filings) for statistical reasons.
Since the promulgation of Regulation on Strict Implementation of Time Limit (2000), many
courts treat retrial case as "filings" in official statistics, consequently the settlement ratio is
higher and the duration of the 'new' case does not take as long between filing and settlement
of retrial, though the total duration is very long if retrial procedure is seen as the continuation
of the original trial.

b) Retrial Procedure and Judicial Cost


According to the statistics, 20-25% of the appeal cases were further filed for retrial in the
higher courts under judicial supervision procedure.392 For instance, in the total filings of
1,376 cases at the High People's Court of Hainan, there were 311 retrial cases, accounting for
22.6% of the total filings.393 This indicates that retrial cases represent big proportion of the
caseload in the higher courts.
From an economic point of view, the goal of litigation shall minimize the costs of error and
litigation costs.394 The retrials not only cause longer duration of the courts, but also incur
more litigation costs and time for the parties and consume judicial resources; consequently it
is not in conformity with the goal of judicial efficiency and justice.
Table 3.15 shows the rate of unchanged court orders/decisions in each year from 1994 until
1999. With respect to retrial cases, during 1994 -1999, the rate for maintaining the original
judgment made in the trial courts is 45%, 42.3%, 38.5%, 35.3%, 28.1%, 26.6%. Though the
rate shows a continuing decline of retrial, the absolute number of cases is still big.
391
Yu, Lei, Analysis on Some Problems in the Civil Retrial Procedure, in: People's Judiciary, (1) 2002, p. 37.
392
China Law Year Book, 1991-2000. Besides, very few trial cases were filed for retrial, according to statistics, only 0.68%
of the retrial cases were the trial cases. See Fu, Yu Lin, The Principle of Structuring the Judicial Hierarchy: a comparative
analysis, in: China Social Science, (4) 2002, p. 84.
393
Zhang, Ai Zhen, Some Suggestions on Restructuring the Judicial Supervision in China, in: People's Judiciary (10) 2001,
p. 19.
394
Posner, Richard A., Economic Analysis of Law, 4 th edition, 1992, pp. 550 - 552.
152 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Table 3.15 Rate of maintained Judgments in Judicial Supervision Procedure (Retrial)


1994 1995 1996 1997 1998 1999

45% 42.3% 38.5% 35.3% 28.1% 26.6%


Source: compiled from statistical data issued by the Supreme People's Court In: China Law Year Book, 1995 - 2000

As civil cases and economic cases share more than 80% - 90% of the total caseload, the
quality of the judiciary is very dependent on the quality of judgment of civil and economic
cases. The high rate of revision of the court orders/decisions indicates that the quality of
judgment made by the court is low. This leads to an overwhelming consumption of time,
which should be allocated to other cases. On the other hand, long duration of retrial impedes
the dispute resolution and increases the cost to the parties.

5. Restructuring the Retrial Procedure

Due to the problem of long delay in the retrial procedure and for cost consideration, it is
necessary for the legislature to reconsider the guiding principle of civil procedure law on the
issue of supervision procedure. In Western countries, especially in continental European
countries, the law imposes strict conditions on retrial in respect to time limit and times of
disposition. In common law countries, the appeal procedure is mainly set up for correcting
the errors in judgments.395 For the Chinese civil process, it would be more efficient for the
legislature to impose stricter conditions for retrial procedures. Some suggestions, as put
forward below, might be recommendable in the future reform.

a) Canceling the Courts' Discretion in Retrial


According to the Civil Procedure Code, the courts have the responsibility to supervise
adjudication and correct errors in judgment. Despite the goodwill of legislature, retrial
procedure initiated by the courts would violate the neutral principle of the courts in litigation.

395
Some scholars debated whether the trial system should be revised from two-tier system to be three-tier system in China
and the current supervision procedure for retrial thus should be the third and final trial. See Wang, Li Ming, Judicial
Research on Judicial Reform, 2000, P. 176, 479; Fu, Yu Lin, The Principle of Structuring the Judicial Hierarchy", in: China
Social Science, (4)2002, p. 84.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 153

Furthermore it would violate the principle of separation of litigation and trial, since retrial
procedure initiated by the courts is likely to generate double function of the courts: on the one
hand, the court acts as a judge and on the other side it acts as a litigant. Moreover, the
intervention of the court goes against the principle of private autonomy in the civil process.
Even if there may have been some errors in judgment, the parties may choose not to go
through the retrial procedure and accept the trial so as to save time and cost. A retrial
procedure started by the courts thus violates the principle of private autonomy. In civil law
countries, it is stipulated in the civil procedure code that only the parties can initiate and
apply for retrial procedure, but not the courts. From this viewpoint, the courts in China shall
not have the discretion to imitate the retrial procedure.

b) Restricting Discretion of the Procuratorate in Retrial


Art. 185 and Art. 186 of the Civil Procedure Code delegate the power to the procuratorate to
supervise the judicial work of the courts. The procuratorate can challenge the court rulings
and ask for a retrial procedure in case of discontent. In practice, such discretion faces
resistance from the courts and gives rise to the discussion of whether or not to abolish such
functions of the procuratorate. In principle, the procuratorate shall not intervene with the
judgment when the parties are able to be redressed by the courts and the procuratorate shall
be restricted to those cases concerning public interest.

c) Limiting the Rights of the Parties


According to Art. 178 - 180 of the Civil Procedure Code, the parties can apply for retrial
when one of the following conditions is fulfilled.
- The composition of members of the tribunal is not in conformity with the procedure.
- The judgment is based on fake evidence, groundless facts and is unlawful.
- The trial violates the procedures.
- New evidence is found and a retrial is necessary.
Under such a broad definition for retrial, the party can apply for retrial in the trial court or a
higher court whenever there is new evidence found. The retrial procedure has no restriction
154 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

with regards to time limit, times of dispositions and judicial hierarchy,396 therefore the parties
can further apply for retrial to the higher court or even the Supreme People's Court after
retrial in the lower courts. Such an irrational system is against procedural justice of the
modem legal system and leads to the repeating of judicial work as well as high litigation
costs.397
The reform of retrial procedure shall regulate specifically the scope of evidence, which is
allowed for the purpose of retrial and time limit for new evidence. Secondly, the retrial
procedure shall consider more narrow standards for the application of retrial procedure in
respect of the time limit since the current time limit of 2 years398 is too long compared with
the retrial procedure in other civil law countries like Germany.399 Thirdly, all the conditions
and reasons for the application of retrial shall be detailed rather than broadly defined.400
Fourth, the times of disposition of retrial shall be limited only to once. Retrial shall only be
conducted by a higher court and the jurisdiction of the higher court shall be final.401 Under
such arrangement for retrial, in fact, 3-tier jurisdiction would be applied with respect to retrial
cases. In this way, the quality of retrial will be higher and the burden of the parties will be
reduced.

VI. Evaluation of the Appeal

The social justification for the appeal process is to correct the errors made by the trial courts
and is to grant the parties the right to be redressed by the higher tribunal.402 The appeal
process requires society to devote a greater magnitude of resources and increases the cost to
the society. The more frequent the appeal, the more cost will be incurred by the society. In the
US, about 16% of cases were appealed in 1992403 and in Germany, about 16% of cases were
brought before the regional courts (Landgericht) for appeal in 1991.404 By contrast, in China,

396
Sheng, De Yong, Some Problems in the Reform of Judicial Supervision, in: People's Judiciary, (8) 2001, pp. 16-19.
397
Gu, Tao, Rethinking and Suggestions to the Civil Retrial Procedure in China, in: People's Judiciary (3) 2000, p. 24.
398
Art. 182 of Civil Procedure Code.
399
Compare Art. 517 of German ZPO, the time limit is 30 days after the party involved is aware of his right for retrial,
nevertheless it cannot exceed 5 months after the original trial.
400
Compare Sheng, Huang Wei, Basic Thinking on Restructuring the Judicial Supervision in China, in: People's Judiciary
m 2002, p. 26.
r
* Gu, Tao, Rethinking and Suggestions to the Civil Retrial Procedure in China, in: People's Judiciary (3) 2000, p. 23.
402
Shavell, Steven, The Appeals Process as a Means of Error Correction, in: Journal of Legal Study, 1995, p. 381.
403
Reports by Administrative office of the US Courts, Federal Judicial Workload Statistics 10, 19, 34 (1993).
404
See Metzler-Poeschel, Statistisches Jahrbuch 1993 fuer die Bundesrepublik Deutschland (1993).
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 155

the rate for appeal and retrial in 1995 was around 7.6%.405 In the previous empirical study
based on 63 appeal cases, it was revealed that these cases consumed 217.6 days in appeal.
Such duration is comparatively long and exceeds the time limit of 90 days for appeal cases
according to the Civil Procedure Code.
There are some findings based on the statistical data with regard to appeal process. Almost
50% of the appeal cases are reversed or revised, or mediated by the higher courts in the
judgment406 Take the statistics of 1995 as an example, as indicated in Table 3.16, 50.7% of
the appeal cases407 still retained the original court decisions made by the trial courts. 49.3%
of the court decisions were made by the trial courts are reversed, revised, mediated, were
under retrial procedure, or were withdrawn by the litigants. Regarding civil and economic
disputes, there was settlement of 208,263 cases concerning civil and economic disputes
(138,585 civil cases and 69,678 economic cases), in which 44.6%408 (66,759 civil cases and
26,211 economic cases) of the original court orders/decisions remain unchanged. This reveals
a low quality of judgment by the trial courts given that the appeal courts were more
competent.

Table 3.16 The Judgments made on the Appeal Cases in 1995


Filing Settlement No. of cases and the type of settlement
Maintained Reversed Retrial Withdrawal Mediation others
Total 272792 271741 137842 54595 21368 19802 24085 14049
Criminal 53576 53942 38786 7989 4140 2127 900
Civil 139298 138585 66759 29865 10865 11313 16418 3365
Economic 70224 69678 26211 15333 5687 5704 7667 9076
Maritime 201 176 66 35 12 17 26 20
Administration 9694 9536 6086 1408 676 658 708
Source:fromChina Law Year Book, 1996

Table 3.17 reveals the ratio of maintained judgment of all appeal cases from 1994 until 1999.
52.1% (1994), 50.7% (1995), 51.5% (1996), 50% (1997), 50.6% (1998), 52.4% (1999) of the
judgment made by the courts of first instance remained unchanged as shown below.409

405
In 1995 there were 4,545,676 trial cases, 272,792 appeal cases and 70,885 retrial cases.
406
Based on China Law Year Book, 1991-2000.
407
The calculation (according to Table 6.2) is: 137842 / 271741 = 50.7%
408
(66759 + 26211) / ((138585 + 69678) - 44.6%
409
Calculation based on the statistical data issued by the Supreme People's Court, in China Law Year Book, 1994 -2000.
156 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Table 3.17 Rate of the maintained Judgments in the Appellate Courts

1994 1995 1996 1997 1998 1999

52.1% 50.7% 51.5% 50% 50.6% 52.4%


Sources: compiled from statistical data issued by the Supreme People's Court, in: China Law Year Book, 1995 - 2000

On average, 51% of judgments remained unchanged in the appeal phase, among the
remaining 49% cases, 8% were withdrawn by the complainants; 40% of the judgments made
by the trial courts were cancelled or regarded as void by the appellate courts, therefore it can
be roughly concluded that 40% of theses judgments made in the trial courts consisted of legal
problems or mistakes in fact-finding. Such a rate is very high. It reveals the fact that many
cases were not correctly solved in the first place and continued to consume judicial resources
and waste the time and energy of the parties involved. Meanwhile, it may also imply that the
quality of the judges in the lower courts were not professional enough, as indicated before.
Compared to the investigation conducted in Taiwan, in the appeal cases, 70% of the judgment
made in the trial court remained unchanged, showing that the quality of judgment was higher
than that of Mainland China.410 The high rate of change of the verdict in appeal reveals that
the quality of judgment in courts of the first instance (mainly lower courts) is low due to the
low quality ofjudges and corruption.
Further procedural reform with respect to appeal shall also be conducted. The appellate courts
in China has the discretion to conduct full reviews of fact-finding and application of law,411
consequently it increases the workload of the appellate courts and affects judicial efficiency.
Thus the courts shall constrain themselves only to the appeal of the parties rather a full
review of facts and application of law, except that the cases have impact on public interest.
Furthermore, mere is a different understanding about the evidence which is allowed to be
presented in the appellate courts.412 The law does not regulate clearly the validity of the
evidence,413 and new evidence is allowed to support the appeal by the parties. Compared
with Germany and the US, in principal, new evidence is not allowed to be presented in

410
Su, Yong Qin, Reform of Judicial Reform, Yue Dan publication 1998, pp. 312,313.
411
Art. 180, Some Opinions on the Application of Civil Procedure Code, issued by the Supreme People's Court.
412
It is the same problem confronting the retrial procedure.
413
Compare Cao, Shou Yue, A Discussion of Reform of Appeal in Civil Litigation, in: People's Judiciary (3) 1999, pp. 4, 5.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 157

appeal.414 The reform of appeal procedure shall strictly regulate the validity of new
evidences. For instance, only those evidences which cannot be collected due to force majeure
or objective difficulties can be admitted and accepted by the courts, whereas those evidences
which are hidden on purpose for appeal and evidences which could not be collected due to
negligence shall not be accepted. With such regulation, the courts can reduce the burden of
the parties and avoid waste of judicial resources; furthermore it will reduce the high rate of
change of trial in appeal, as well as reducing filing for appeal, retrial, and the re-opening of
the procedure. The stability of the law can be more effectively guaranteed and court
efficiency can then be improved.415

VII. Accessibility of the Court

1. Litigation Cast

Accessibility of the court can be enhanced by reducing litigation cost; but on the other side,
the reduction of litigation costs would increase the financial burden of the courts and affect its
functioning. In China, due to the lack of budget from the state, the courts rely heavily on the
income from court fees. In some provinces, more than 60% of the total budget of the courts
comes from court fees. To the parties, various fees are charged in the civil process, the total
litigation costs in lawsuits share 15 - 20% of the amount claimed by the parties (for more
details, see Chapter 4 about the study of litigation cost). Beside this, corruption is still a
severe problem and the charge of corruption adds the costs of using court service implicitly.
Furthermore, the race to find a 'relationship' with the courts or the local governments to
influence the outcome of the judgment exhausts the time and energy of the parties. The
quality and the role of lawyer as middleman for bribery further impede the confidence of the
general public to utilize the legal services. Considering these factors, the using of court
services to resolve disputes is an expensive process.
Frequent changes in the outcome of the judgment in appeal and retrial procedure increase

414
See Art. 511 ff. of German ZPO, new evidence might be accepted only with the consent of the other party and his/her
lawyer, Art. 16 the American Federal Rules of Civil Procedure.
415
Compare Cao, Shou Yue, A Discussion of Reform of Appeal in Civil Litigation, in: People's Judiciary (3) 1999, pp. 4, 5
158 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

uncertainty and cost to the parties. The lack of predictability of the outcome in litigation

reduces the willingness of the parties to solve disputes within the courts. Furthermore, the

low probability of law enforcement frustrates the parties in pursuing justice within the

courts, as it means the cost of using the court service is too great when the court

orders/decisions cannot be enforced or need a long duration for enforcement.

Z Legal Aid

In broad terms, legal aid refers to a reduction in or exemption of lawyers' fees, court fees

and/or notary fees, etc. The aim of legal aid is to provide accessibility of court to the poor

who are unable to pay the various fees involved in pursuing a case. Legal aid thus helps to

provide court remedy and justice to such parties.

In China, legal aid was introduced to improve accessibility of justice at the beginning of 1994,

at which time it was proposed by the Ministry of Justice. In 1996, the basic principle and

framework of legal aid was written in the Criminal Procedure for the first time in legislature;

in 1999 regulation of legal aid to civil cases was issued by the Supreme People's Court and

the Ministry of Justice.416 According to the law, women, elderly, young people and the

handicapped have priority in obtaining legal aid. According to statistics of legal aid cases,

16.1% of legal aid was extended to young people with low income. From January to May of

2000,21% of the legal aid was extended to women.417

However, due to the lag of legislature in legal aid, there are some problems in practice. First,

the lack of coordination among the courts, judicial administrations and bar associations leads

to loose administration of legal aid. Secondly, there is no unified administration at the

national level. Third, the application for legal aid is not easy. Due to the lack of time and

funds, some organizations can only provide limited legal aid to the parties; as to legal aid

provided by the lawyers, due to the lack of lawyers in China,418 and increasing demand for

legal aid, lawyers first consider providing services to big firms, government organizations

and those who have financial capacity.

See: Notification on Legal Aid to Civil Cases, May 1999, by the Supreme People's Court and the Ministry of Justice.
See: Periodical Report of Legal Aid in China, in: China Lawyers, (8) 2000.
The average number of lawyers per person in China is only 5% of that in the US.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 159

Legal aid should be further enhanced to provide service and assistance to those who are in
urgent need of legal assistance but are financially poor so that their legal rights can be
protected. Furthermore, legal aid from lawyers will help the parties to protect procedural
rights in litigation. For example, evidence can be collected more effectively and efficiently
with the help of lawyers. In China, due to the weak legal consciousness among the public,
legal education and legal aid will thus play an important role in accessibility to the courts and
provide remedies for the weak parties. Since the laws and regulations with respect to legal aid
are too diversified and lack systematic summary, it is important for the state to promulgate a
law specifically for legal aid with practical regulations and rules.419

VIII. The Role of Mediation and Arbitration

1. Mediation

a) Mediation by People's Arbitral Committee


Mediation as an alternative dispute resolution mechanism plays a very important role in the
judiciary. According to statistics in 1998, there were 983,700 People's Arbitral Committees420
in China and there were a total of 9,175,300 arbitrators. 5,267,200 cases were brought to the
arbitral committees and 5,049,400 cases were successfully resolved, which is 95% of the total
cases.421 These cases mainly relate to heritage, neighborhoods, private debt, property,
personal injury and other small disputes.
The People's Arbitral Committees resolve, on average, 6 - 7 million cases yearly, which are 3
~ 4 times the cases filed in the courts of the first instance.422 This indicates that mediation by
arbitral committees has considerably relieved the burden of the courts and helps to alleviate
the problem of backlog and court delay by reducing filing in the courts substantially.
However, most of these arbitrators lack education and necessary knowledge in dispute

419
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press 2000, p. 309.
420
The People's Arbitral Committee is defined as an organization which is under the guidance of the local government and
the local court. It is established to solve general civil disputes and some small penalty cases. Normally the Arbitral
Committee is under the administration of the district or the Resident Committee of the district in the city. In the countryside
it is established in each village. The People's Arbitral Committee normally consists of 3 to 5 mediators.
421
Source from China Judiciary Administration Year Book (1999X China Law Press, 2000, p. 17.
422
In an empirical study, it reveals that the high rate of mediation is due to the difficulty and fear of court procedure by the
parties, especially in the countryside. See, Liu, Guang An and Li, Cun Bang: Civil Mediation and the Protection of Rights, in:
Xia, Yong, Towards an Age of Rights, China Law and Politics Publication, 2000, p. 273.
160 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

resolution. It is necessary to provide training to these arbitrators so that the quality of the
resolution will be improved and the number of filings in the courts will be reduced.

b) Mediation by the Courts


To a startling degree, the costs that matter are the costs of the cases that reach trial. In fact, a
majority of the cases filed in the lower courts, especially in the District Courts are settled
voluntarily before trial and relatively little court time is required. Mediation and
reconciliation by the courts therefore would reduce the amount of cases waiting for trial and
save time for the minority of cases, which take up the overwhelming majority of judges'
time.423
According to Art. 10 of Civil Procedure Code, the courts shall first consider other means of
mediation to solve the disputes.424 In case of failure of mediation, the case shall be disposed
in time by trial. Compared with trial, court mediation enables the judges to dispose more
cases in a shorter time and to avoid court delay. On the other side, appeal or retrial is not
allowed in cases settled by mediation; therefore it is no surprise to see that judges in China
have preference to settling the cases by mediation when the workload of cases is heavy on
them. In practice, some judges even force the parties to accept settlement through mediation
and ignore the procedural rights of the parties. As mentioned in the previous study, the judges
use mediation to have a speedy settlement and avoid exceeding the time limit. To realize the
time bound program, the procedural and substantive rights of the parties are often sacrificed.
In procedure reform, it should be stressed that the priority of mediation as dispute resolution
should be based on the willingness of the parties rather than the judges' will.
Nevertheless, the importance of mediation shall not be ignored. For instance, in 1997, among
3,242,202 cases settled by the court of first instance, 50.9% of the cases (1,651,996) were
settled by mediation; in 1999, among the 3,517,324 cases settled by the trial courts, 42.7% of
the cases (1,500,269) were settled by mediation.425 Mediation plays a very important role in
reducing the duration of courts and the litigation costs. The procedure reform shall further

423
Zeisel, Hans, Kalven, Harry, Jr. and Buchholz, Bernard, Delay in the Court, Little, Brown and Company, 1959, p. 5.
424
In China, the process of mediation is controlled by the judges, therefore, mediation is considered as trial activity in China.
It is very unique compared to the legislations in other countries. See Qi, Shu Jie, Research on Reform of Civil Procedure
Law, Xiamen University Press 2000, pp. 156,157,166.
425
Sources compiled from China Law Year Book, 1998,2000.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 161

enhance the quality and quantity of mediation, as well as the enforcement426

2 Arbitration

Arbitration as an alternative dispute resolution can provide lower costs and speedy remedies

to the parties. Moreover, as the arbitrators are professionals and the rule of arbitration is fair

to all the parties, arbitration can provide a binding resolution for the parties.

As of June of 2000, there were 150 arbitration organizations in China, including the

International Economy and Trade Arbitration Committee under CCPIT (China Council for

International Trade Promotion) and Maritime Arbitration Committee, with more than 2100

members, 1300 employees and more than 17,000 arbitrators. In reality, these newly

established arbitration organizations did not function well as it was expected. From the

enactment of Arbitration Act in 1995, the number of total cases disposed by all arbitration

committees was around 170,000 cases, with a value of 25.7 billion Yuan. The disposition of

cases by arbitration increased in 1999 only with 6,353 cases relating to contract disputes.427

Compared with the data from 1992, the Industry and Commerce Bureau in 29 provinces and

cities, the number of cases disposed in 1999 declined sharply. The number of cases disposed

by Economic and Contract Arbitration Committees in 1992 was 279,617, among which

283,368 cases were settled through mediation of the arbitrators and 5520 were settled by

award.428

There are some obstacles to apply arbitration: first, many corporations, economic

organizations and individuals know little about arbitration. In an investigation made by the

Arbitration Committee of Nantong City/Jiangsu province, only 4% of the investigated firms

expressed that they knew much about arbitration. Secondly, in the case of enforcement of

arbitration award, the courts often use it's discretion to review the arbitration award and even

cancel the award. Thirdly, the arbitration award is not stable, since the Civil Procedure Code

allows the courts to choose not to enforce the award in case of disagreement. Furthermore,

the Arbitration Act allows the arbitration committee to cancel the award in case mistakes are

426
Qi, Shu Jic, Research on Reform of Civil Procedure Law, Xiamen University Press, p. 173.
427
Sources from the report "The Fifth Arbitration Conference on Exchange of Experiences Held in Kun Ming (City)", in:
Arbitration and Law, 2000.
428
China Law Year Book, 1993, p. 154.
162 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

found. Thus, an award may be challenged and lead to instability of the legal status.
In fact, many cases can be shifted from the courts to the Arbitration Committees, which have
more than a few cases nowadays in China. In China, due to the lack of goodwill of the courts
in enforcement of award, the arbitration committees try to find cooperative measures within
the courts. Some court presidents, especially those who are in charge of enforcement, are
invited to have a position on the arbitration committees, by such arbitration award can be
more easily enforced.
Due to the above mentioned problems, it may be practical to incorporate arbitration into the
court system, as court-annexed ADR has proved to be very efficient in many western
countries.429 Under the court-annexed ADR, cases can be shifted from the courts to
arbitration organizations, which do not have many cases nowadays. Moreover, the
confrontation with respect to enforcement of awards and review of awards by the courts will
diminish. Consequently, the parties are more willing and confident to submit the cases for
arbitration to save time and cost when enforcement will not be confronted with resistance
from the courts. However, the role of arbitrators and judges shall be strictly separated.430

IX. Lawyers' Engagement and Court Delay

Lawyers' engagement in the civil process has its importance in speeding up the pretrial
process and realizing justice. The engagement of the lawyers can reduce the workload of the
judges with respect to evidence-collection and fact-finding. In many Western countries, legal
service is very developed. For instance, in the mid 1990's, the number of American judges
was around 46,000, whereas the number of lawyers amounts to more than 800,000,431 this
highly developed sector of legal service has helped to reduce the time of judges in pretrial
activities like collecting evidence and fact-finding. It is almost the same in the UK and
Germany. By contrast, the legal service in China is still in its infancy. Lawyer, as a profession,

429
Since 1970's, the courts in the US introduced ADR into its traditional dispute resolution mechanism and enriched the
reform of Civil Procedure Rule; Art. 16 of Federal Civil Procedure Rule allows judges to consider the possibility of
reconciliation and out-of-court dispute resolution before pretrial meeting. The new UK Civil Procedure Rule in 1999 has
explicitly incorporate ADR into court system and ADR is taken as an effective means for case management. Court-annexed
ADR is accepted by the courts in Canada, Australia, New Zealand and Germany. It is evident that almost all forms of ADR
can be incorporated into court system, fro example, court annexed arbitration, court annexed mediation etc..
430
He, Bin, Restructuring the Mechanism of Dispute Resolution, Peking University Law Journal, Vol. 14, No. 1 (2002), pp.
30,31.
431
See Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press 2000, pp. 128,129.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 163

was recognized in the beginning of 1980's and since then the number of lawyers has steadily
increased: in 1993, the number of lawyers was 68,834; in 1999, there were 101,220 lawyers
and around 170,000 judges in China.432 However, the proportion of lawyers is still
comparatively too low Such allocation of judicial resources is not possible to change in the
short run. Consequently, procedural reform will be affected since judges often have to take
over the work of evidence-collecting and even fact-finding in the absence of lawyers'
participation.433 Judges still have to take time for pretrial preparation since many people lack
the capability to collect evidence and the competence to participate in the civil process
actively.
In this context, lawyers' engagement will help reduce the workload of the judges and enhance
the efficiency of litigation despite some tactical practices used by the lawyer's in delaying the
process. Furthermore, judicial reform, especially the procedural reform with respect to the
burden of proof and other pretrial preparations shall consider current legal resources in China.

X. Procedure Justice and Judicial Reform

Procedure is the heart of the law;434 In Rawls's formalistic theory, legal procedure is the
basic requirement of justice. The rule of law is dependent upon the formalistic process that is
mainly realized by formalistic procedure. Law should minimize the moral costs in the course
of enforcement and reduce losses arising from mistakes in judgment, which deprives one's
rights. According to Dworkin, it is necessary to design procedural right so as to reduce the
moral cost and realize substantive justice.435 According to Max Weber, formal justice is the
requirement of judicial formality. Posner argued that law should consider efficiency and
should minimize the social cost by reducing the direct and indirect cost.436 In these
viewpoints, procedure is regarded as a tool for substantive justice and reduces consumption
of resources. Justice is the most important value in the society.437 Furthermore, a just
procedure will guarantee the stability of law, continuity of the procedure and the predictable
432
Sources from China Judiciary Administration Year Book, 1993 and 1999. and China Law Year Book, 1999.
433
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press 2000, p. 129.
434
Song, Bing, Procedure, Justice and Modernization,China University of Politics and Law Publication, 1998, p. 363.
435
R.M. Dworkin, A Matter of Principle, Clarenden Press of Oxford, 1985; R. Aduff, Trial and Punishment, Cambridge
University Press, 1986, p. 110 - 114.
436
Posner, Richard, Economic Analysis of Law, Little Brown Publication, Boston, Toronto, 4 th edition 1992. p. 541 - 551.
437
Rawls, John, A Theory of Justice, Harvard University Press, 1997, p. 3.
164 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

outcomes of the law.438 The judgment can only be legally justified when the judge follows

the procedure, since judgment is not just an arbitrary decision. The outcome is easily

accepted by the parties when the procedure is followed.

Unlike Western countries, the concept of procedure justice does not exist in the Chinese

judicial history and leads to a dim view of procedural justice. In the current legal practice, the

courts stress more substantive justice and despise procedure justice. Furthermore, under the

current inquisitorial system,439 judges enjoy a great amount of discretion and dominate the

process of trial in respect of inquiry, evidence-collection, etc. The procedural rights of the

parties are often ignored and violated by the judges.

In this context, procedure reform shall stress the importance of procedural justice. A just

procedure provides a security mechanism for the application of law, and it is also the

foundation of the rule of law For instance, court-arranged mediation has been one of the most

important dispute resolution mechanisms by the courts. On the one hand, it has been proved

that mediation as a means of ADR can improve litigation efficiency and reduces court delay

and costs, but many civil cases are settled by 'compulsory' mediation by the courts,

especially at the end of the year when the courts speed up disposition of cases and ask the

parties to agree by mediation rather than by trial. In such cases, substantive justice would be

sacrificed if there were no procedural guarantee. A just procedure ensures that trial will be

undertaken systematically since the procedures are rules based on judicial principles and

experiences. The cardinal order from filing, acceptance, public hearing, and judgment to

enforcement cannot be changed by the arbitrariness of the judges. The practice of internal

communication and ex ante conclusions drawn before the trial, or collusion between the

judges and the parties, will only lead to the miscarriage of justice. Therefore, a just procedure

can restrict the arbitrariness of the judges and can effectively deter the abuse of power in

judgment. The design in judicial hierarchy, time limit of disposition, public hearing and

judicial supervision is to restrict the discretionary power of the judge properly. The more

proper of the restriction of arbitrariness in jurisdiction, the more rational the procedure will be.

438
Jiang, Ping, "Summary on the Seminar of Civil Judicial System", in Law Research, (5) 1998.
439
Inquisitorial system refers to the litigation pattern applied by the judges in the civil law countries like Germany, where
judges have big discretion in evidence-collecting, inquiry, fact-finding etc. The so-called "Super" inquisitional system is a
term to describe the current Chinese civil process in which the judges enjoy too big discretion throughout the process. See
Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 312 - 315.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 165

On the contrary, justice will not be secured and the judges may be corrupted easily if the

judge is allowed not to follow the procedure and make an arbitrary judgment, or not to follow

the procedure of evidence-collecting and meet privately with the parties and the lawyers.

Miscarriage of justice is likely if a decision is made in advance through closed-door

discussion before the trial, or allowing ex ante communication. Moreover, justice* may also

not be realized if the cases are not open for public hearing and legal reasoning is not

sufficient to justify the adjudication. Procedural reform shall be further aimed at restricting

the judges from making judgments simply based on his/her understanding of the facts,

without listening to the statement of the parties, or simply based on the evidence collected by

himself/herself and disregards the evidence from the parties. At the same time, the procedure

shall treat all parties equally, irregardless of the social status of the person.

Procedural reform shall also stress the efficiency of the courts. From the view of society,

justice means efficient allocation of social resources and reduction of the waste of economic

resources. A stable, predictable legal system will create a better investment environment for

the investors and increase their confidence in property exchange with good faith and

expectation of future profit. From this viewpoint, procedure justice will maximize social

welfare and enhance economic efficiency. On the other hand, efficiency does not mean

simplifying the procedure to reduce appeal costs in some cases. Although appeals may incur

higher litigation costs to the parties, the procedure is necessary to guarantee justice will not

be abused.

Procedure justice should reduce court delay and reduce the costs borne by the parties and the

state. Litigation cannot be endless and must be settled within a certain time limit. The time

limit shall be applied for trial and appeal, as well as for retrial. The current Civil Procedure

Code does not make it clear what the time limit is for providing evidence and the exact time

limit for settlement of case by mediation. With respect to retrial procedure, there is no time

limit for trial and no restriction on times of disposition; consequently, the retrial process is

long and unbearable. The endlessness of a trial challenges the finality of law and increases

the workload of the judiciary. The procedural reform therefore shall touch on these issues and

a workable framework both for justice and efficiency shall be established.


166 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

Furthermore, current legal reform in China needs to transplant those successful and practical
experiences from other legal systems in Western countries. For example, in civil law
countries, it is regarded that the civil process emphasizes less on the facts and evidences, and
lacks the feature of "discovery" process. The appellate court has to review all the facts and
legal points again. This may result in low efficiency compared to the American civil process
in which the dispute of facts cannot be taken as a reason for appeal.440 However, the civil
process of common law is dominated by the lawyers and leads to lengthy debate, which may
also cause delay; the jury's participation is also not in line with the efficiency principle.
Compared with the judge-dominated system of civil procedure, the lawyer-dominated
procedure is regarded as less efficient.441 Strictly said, the adversarial system (Common Law)
is much rational in restrains the arbitrariness of the judges and is more likely to realize
substantive justice. The two legal systems are continuing efforts to enhance efficiency; for
example, a jury system is not applied in civil cases in Britain and more emphasis is put on
mediation before the trial, while civil law countries are reforming the regulations on evidence.
These practical experiences are useful for domestic reform

XI. Summary

In this part, critical assessment has been made to the functioning of the court system in China
addressing the problems existing in the judiciary and factors affecting court delay.
The efficiency of the courts is heavily influenced by number of cases settled, settlement ratio,
duration of the cases and size of backlogs, etc. The efficiency analysis of the legal system in
China cannot merely rely on the settlement ratio and duration, other factors like the average
disposition and human capital shall be taken into consideration. The time bound program for
time limits and settlement ratios is good in consideration of reducing court delay and
congestions, but it must be designed to guarantee the procedural rights of the parties and
quality of the judgment and it needs to take into account some measures such as framing

440
Kerameus, Konstantions D., "A Civilian Lawyer Looks at Common Law Procedure", in Louisiana Law Review, Jan.
1987,47 La. L. Rev. 493; also see Wang, Li Ming, Research on Judicial Reform, China Law Press, 2000, p. 78.
441
Langbein, John H., The German Advantage in Civil Procedure, 52 Chicago Law Review, 1985.
Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts 167

more effective criteria in granting adjournments.

Secondly, the Trial Committee has a great amount of discretion in jurisdiction and its

interference has heavily affected the independence of judges and has even lead to lengthy

duration of cases. The abolishment of the Trial Committee in the courts should be coupled

with improvement of human capital in the courts.

Third, as most of the cases filed in the lower courts are simple in fact-finding and application

of law, the courts should establish summary courts or small claims tribunals to deal with these

cases. The principle of 'one trial as final' rather than a 2-tier jurisdiction should be also

applicable so as to reduce the time of disposition and cost.

Fourth, the supervision procedure shall be restructured so as to improve court efficiency and

reduce court delay. Measures shall be taken to deter the strategic behavior of the parties in

conducting long litigation; for instance, time limits shall be applied for evidence and liability

shall be imposed in case of hiding evidence in the previous trial. Furthermore, since the

courts and the procuratorates are given too much discretion to initiate retrial procedure and

interfere the private autonomy, the reform shall restrict the discretion of the courts and the

procuratorates and the retrial procedure can only be initiated by them, and only when the civil

cases are related to public interest.

Fifth, the error cost is high due to the fact that a high proportion of court orders/decisions of

the trial courts are canceled reversed or revised by the appellate court; therefore, reform shall

be aimed to improve the quality of the trial in the courts of the first instance. The time bound

program should be workable and reasonable adjournments shall be allowed to avoid mistakes

due to speedy disposition. Meanwhile, it is very important to improve the human capital in

the lower courts (district / county courts and intermediate courts) since these courts dispose

80 - 90% of the total civil cases yearly in China.

Sixth, the accessibility of the court can be enhanced by reducing the litigation cost,

simplifying filing procedures, and the availability of legal aid for the poor.

Seventh, an ADR mechanism can effectively reduce court delay and cost. The tradition of

mediation shall be strengthened while respecting the procedural rights of the parties for trial.

Furthermore, due to the high quality of arbitration in China, some cases, especially economic

cases, can be transferred from the courts to arbitration committees so as to relieve the
168 Chapter 3 A Survey of the Functioning of Court System: Duration of the Courts

caseload of the courts. A court-annexed arbitration mechanism may improve efficiency in

respect of law enforcement.

Further, lawyers' engagement in the procedure will provide more protection to the parties

given the fact that many individuals have a dim view of law in the society. Lawyers'

engagement can further reduce the problem of court delay since the shift of burden of proof

and pretrial preparation will relieve the workload of the judges. Reform of procedure law

shall also consider the current judicial resources in China; meanwhile, a reasonable cost

scheme shall be designed by the judicial administration so as to foster the use of legal service

and access to justice.

Finally, the current reform in China focuses on procedure reform, which is aimed at

improving procedural justice and court efficiency. Judges in China have the tradition of

stressing on substantive justice and dim view of procedure justice, and they enjoy big

discretion in civil process. Procedural rights of the parties are often ignored and violated.

Thus, the current judicial reform shall put stress on procedural justice since a just procedure

will provide a security mechanism for the application of law and ensure substantive justice.

Furthermore, procedural reform shall also take the efficiency and cost into consideration.

Procedure reform shall reduce delay in the courts and enhance accessibility of justice.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 169

Chapter 4

A Survey of Litigation Costs, Court Budgets and Access to Justice

The charge of various court fees has impeded the accessibility to justice. Under current administration of

court fees, which are transferred to the local administrations and then reimbursed proportionately to the

courts, the courts have more incentive to increase income by charging excessive fees. Meanwhile, the lack

of budget autonomy leads to the interference of the local governments as well as the longer duration of the

trial. To guarantee budget autonomy under current situation, it is practical to establish a two-tiered budget

supply, namely, the remuneration of the judges and operational costs of the courts shall be guaranteed by

budget of the state, whereas the costs for court facilities shall be borne by the locals. Under such budget

allocation, the judiciary will be less dependent on the locals and the worries of the judges will be

relieved.442

I. Introduction

The cost of a judicial system consists of mainly 2 parts. One is the public cost which is borne
by the state in establishing the judicial system; the other is the private cost which is charged
by the court such as litigation cost and lawyers' fees which are borne by the parties.443 The
functioning of the court system in a country is heavily affected by the burden of these costs.
In economic terms, costs will affect the demand. The burden of the litigation cost of the
parties will influence the decisions of the parties on whether or not to go to the courts for
remedy under a certain constraint such as the probability of winning their case and
enforcement of judgments. Additionally, delay and backlog will increase the price to the
parties implicitly; consequently, people will react to this added cost by reducing their filings
and not redress their grievances within the court system.444
In China, lawyers do not monopolize all of the litigation cases since the Civil Procedure Code

442
Summarized view from different literatures with respect to budget autonomy for the courts.
443
See Fu, Yu Lin, The Nature of Litigation Fees and the Burden of Litigation Costs, Peking University Law Review, Vol. 4,
No. 1,2001, pp. 239-243.
444
Supra note 29.
170 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

allows a non-lawyer to represent the parties; consequently the parties involved depend less on

the lawyers to plea their case. Besides cost considerations, non-engagement of lawyers in

litigation has much to do with the fact that lawyers are not trustworthy nowadays because of

bribery, lack of necessary legal training and substandard professional knowledge. If lawyers'

roles are only seen as mediators and middleman in bribing judges, this will only increase the

additional costs of litigation rather than increasing quality legal service as expected. In the

past years, the moral hazard has been a hurdle for the development of the service sector of

lawyers.

Furthermore, the court budgets will also affect the functioning of the court system. The lack

of financial support to the judiciary could lead to a dysfunctional judicial system. In other

words, if the courts lack financial support in office facilities, highly skilled personnel and

other infrastructures like vehicles, communication equipment, etc., the filing and disposition

of the cases will be affected and a prompt disposition is unlikely in such a situation. In

Germany, litigation costs have arisen dramatically as a result of savings policy, which shifts

the fees to the litigants.445 Should the state save money and let the litigants pay more

litigation costs or should the litigants simply sway from the courts and seek justice through

other means or just bear the cost of possible court delay?

In this context, this chapter will discuss how these costs affect the efficiency of the court

system in China. It also attempts to give policy suggestions on how the state could invest in

the court system, and whether or not the state should reduce litigation costs or shift the

burden of costs to the litigants. At the same time, how to regulate lawyers' fees and build a

modem, well functioning law profession is also essential to the success of judicial reform To

answer these questions, first, a general review of cost composition will be made and some

examples will be discussed to demonstrate the burden of litigation costs for the parties.

Secondly, an investigation based on secondary data with respect to judicial costs incurred in

the courts of Jiangxi province will be made in an attempt to show the accessibility of the

courts and the necessity of the state to provide sufficient financial support to the courts.

Schaefer, H.-B., Kein Geld ftir die Justiz - Was ist uns der Rechtsfrieden wert?", in DriZ, 1995, p. 461.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 171
II. An Investigation of Litigation Costs in China

1. The Burden ofJudicial Costs and Litigation Costs

Civil process has incurred various litigation costs from its beginning. These costs can be
summarized as the total amount of all consumed human resources, material cost and
monetary expenses arising from litigation. Civil litigation costs are unavoidable to the
parties, such a "cost of producing justice"446 is divided into 2 parts: the "litigation cost" or
referred to as private cost, borne by the parties involved in the civil cases and 'judicial cost",
referred to as public cost, borne by the state. Public cost in terms of the judiciary means the
budget from the state in order to establish a judicial system for resolving civil disputes, and
investment in judicial resources such as operational expenditures, court facilities and
personnel etc. The litigation cost mainly includes:
- Litigation fees / court fees,
- Lawyers' or representation fees,
- Travel costs,
- Costs relating to litigation like evidence collection, time and energy spent for the hearings,
and other expenditures in relation to the claims, etc.
- Costs arising from security of title and measures for compulsory enforcement of court
orders.
The second part of the cost is the judicial cost borne by the state to guarantee the functioning
of the judiciary with respect to judgment, prosecution and enforcement, etc.. This part of cost
mainly includes:
- Salary and welfare of court personnel
- Facilities: office buildings, equipment, vehicles, etc.
- Investigation costs
- Hearing of cases
- Enforcement
Besides these two types of costs, there could also be error costs447 in judgment due to

446
Supra note 171.
447
Posner A. Richard, An Economic Approach to Legal Procedure and Judicial Administration, in Journal of Legal Studies,
2 (1973), pp. 3 9 9 - 4 0 0 .
172 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

mistakes of judgment, or moral costs, namely an unfair judgment leads to a waste of

economic resources.448

The functioning of judiciary incurs costs to the state and the parties involved. To guarantee

social justice and the functioning of the court system, the state should provide an adequate

budget to the courts. The budget from the state (public cost) is consumed in the course of

judgment, and part of the budget is spent in the filing and administration of the courts,

whereas the litigation fee charged to the parties is used to cover part of the judicial cost and

serves as a function for taxation to the court-users.

However, there are pros and cons regarding litigation costs. Those who are against court fees

hold that: first, the state is responsible for providing adequate court remedies and court fees

shall be burdened by the state; secondly, court service shall be public goods provided by the

state, therefore the charging of court fees would mean a double taxation; third, in a state of

rule of law, people have the right to get access to justice, charging of court fees would impede

accessibility of justice to the poor; consequently, the state has the responsibility to provide

court remedies and shall not charge court fees. Whereas the opposite view holds that court

fees shall be burdened by court-users, such cost shall not be borne by the state and the people

who never use court services. The charging of litigation fees will prevent those who may

misuse court services and in a way force them to abide by the law.

Distribution of judicial costs between the state and the parties would have a strong influence

on the functioning of the courts and accessibility to justice. The state can shift part of the

public cost to court-users by raising the court fees or relieving the burden on court-users by

taking over the work of investigation, collection of evidence and thus bear part of the private

cost. The allocation of these costs will influence the number of filings since cost distribution

may hinder or enhance some people's capability to get access to the courts, for instance, a rise

in litigation cost will reduce meaningless filings and the workload of the courts, but likewise

such reform shall not impede the accessibility to justice; therefore, a reasonable and

well-designed judicial policy also takes the mechanism of legal aid into account.449

The current reform in respect to litigation cost in China faces two problems. On one side, the

reform shall reduce the burden of the parties and lower the cost in consideration of the
448
R.M. Dworkin, A Matter of Principle, Clarenden Press of Oxford, 1985.
449
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 371.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 173

income level of the people; on the other hand the state shall provide adequate budget to the

courts so as to guarantee and improve the salaries of the judges and invest in the facilities of

the courts.

2 Litigation Costs

In the civil process, the parties have to pay various fees to the courts. These court fees mainly

include: (1) case disposition fees/litigation fees;450 (2) fees for inspection, verification, public

announcement (3) costs arising from transportation, accommodation, food, verification and

translation of materials, and compensation to the witness due to their absence from their

workplace (4) fees for applying for security of title and relevant costs arising thereof; (5) fees

for execution of court decisions, arbitration awards and mediation agreements; and (6) other

litigation costs which should be borne by the parties according to the view of the court.

There has been a shift in court fees. The losing party has to bear not only legal costs on

his/her own but also the litigation fee of the opposite party.451 In case of expert's advice or

witness hearings, the loser has to bear the costs of the services of the experts. Conversely, in

case of winning, the prepaid court fees can only be recovered from the losers rather than by a

direct reimbursement from the courts; furthermore the winner has to bear the risk that they

might not be able to collect the compensation and the legal costs such as court fees etc. 452

Table 4.1 illustrates the budget of litigation cost which may incur to the parties according to

the Regulation on Litigation Cost (1989).

Case disposition fee or litigation fee is changed according to the amount of the claim, namely, the dispute value. The
litigants must prepay the fee in each case. Judges can decide the proportion of the court fees borne by each party according
to the liability in causing the disputes. This is similar to the Austria ZPO, see Hans Zeisel, Harry Kalven, Jr. and Bernard
Buchholz, Delay in the Court, Little, Brown and Company, 1959, pp. 292,293,294.
451
According to Art. 107 of Civil Procedure Code, the litigant shall pay the litigation fee in advance to the court.
452
In China, judges can decide sharing of the court fees among the parties involved according to the liability of each party
causing the disputes. There is no regulation about the shift of lawyers fee. Normally, each party bears his own cost for
lawyers' engagement. Supra note 450.
174 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

Table 4.1 Budget of Litigation Cost

The standard for charging Case Supposed Security Fee Execution Inspection, Lawyers Fee Tt)tal Percent

Disposition Fee 'Dispute Fee Fee verification Amount

The corresponding Rate Value' Rate Fee Rale Fee Rate Fee Rate Fee

amount

<1000 50 Y* 1000 50 30 50 1% 50 4% 40 270 27%

1000-50.000 4% 20000 800 1% 200 0.5% 100 1% 200 4% 800 2100 103%

50,000-100,000 3% 60000 2310 1% 600 0.5% 300 1% 600 3% 1800 5610 9.3H

100.000-200.000 2% 150000 4510 0.5% 750 0 5% 750 m 1500 3% 4500 12010 8%

200,000-500,000 1.5% 210,000 5560 0% 1050 0.5% 1050 1% 2100 3% 6300 16060 7.6%

500.000-1.000,000 i% 900ADO 13010 0,5% 4000 0 5% 4000 1% 8000 2% 16000 43010 5.6H

> 1.000.000 0.5% 1,100 JDOO 15510 0.5% 5500 0 5% 5500 1% 11000 2% 22000 5P510 5.4%

* For dispute value below 1000 Yuan, 50 Yuan will be charged.

Some remarks to Table 4.1:


a) The calculation of case disposition fees/litigation fees is based on the accumulative amount
of each corresponding amount times the rate as indicated in the second column of the table.
For example, if the supposed 'dispute value' is 600,000 Yuan, the calculation will be as
follows:
For the part below 1000: 50 Yuan

The part above 1000 up to 50,000: 49,000 x 4% = 1960

The part above 50,000 up to 100,000: 10,000 x 3% = 300

Thus, the case disposition fee is equal to the accumulative amount, namely 2310 Yuan.
In case of appeal, the same fee amount must be paid to the appellate court.
b) There is no uniform regulation regarding lawyers' fees. Normally lawyers are allowed to
charge fees according to the local economic level and the financial status of the parties.
c) Fees in respect to inspection/verification/public announcement may not be incurred in any
case and there are no uniform standards for charging this fee.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 175

Table. 4.1 reveals the normal expenditure for the parties and shows that the parties have to

pay high litigation costs in the civil process. The costs are regressive; higher claims do not

demand proportionate costs. The average litigation cost amounts to about 10% of the 'dispute

value' of the case.453 For instance, in a case with a 'dispute value' of 600,000 Yuan, the

litigant has to pay 5610 Yuan if he wins the case; furthermore he has to consider the risk of

failure of enforcement. Additionally, under the current procedural reform, the burden of proof

is mostly shifted to the litigants and therefore the parties have to consider a cost increase in

witness fees and travel costs for investigation.454 These additional costs are sometimes

charged by the courts at 5% or 6% of the 'dispute value', or even higher, possibly up to

10%.455 Thus, the total litigation cost would be 15% - 20% of the 'dispute value' or even

higher in case of more factors being involved.

One example456 illustrates the high litigation cost incurred in the legal action against its

debtors during the court of the first instance in 1997 and 1998 by KT Company (hereinafter

called "KT"). The company is a state owned financial institution located in city A. In 1997

and 1998, KT lodged claims against 20 debtors for refund of loans. Table 4.2 presents a

record of litigation fees incurred in the court of the first instance for 13 cases. In 8 cases, the

debtors had no objection to the amount of loan and interest accrued thereof, as well as the

time to repay the loan, therefore for these 8 cases the creditor could apply to the court and

order the debtor to pay the money back under the non-litigation procedure457 and there would

be no need to pay litigation fees to the court according to the Civil Procedure Code. Though

KT has applied to the court to do so, the court rejected applying the non-litigation procedure

and the cases were handled under the litigation procedure. If KT could succeed in applying

for a court order to pay debts due, then it would save up to 99% of litigation costs.

453
In small claims it would not be economic to have lawyer's engagement and to appeal, otherwise the costs would even be
higher than the claims. This is also the case in German Civil Process, in which the costs could be even many times of the
claims, see Franzen, Hans, Was kostet eine Richterstunde? In: NJW1974 Heft 18, p. 786.
454
In reality, the courts in China shift most of the costs to the litigants, even the cost for Xerox, printing and the postage. In
case of traveling for investigation, the parties have to bear the cost of the courts.
455
See an investigation conducted by two lawyers about the litigation cost in civil process. Liu, Tong Hai and Zhu, Xiao
Long, Is the Court Fee Reasonable? In China Lawyer, (12) 2002, p. 40.
456
This example is based on the one presented by Fang, Liu Fang, Research on Litigation Cost, in: China Social Science, (3)
1999, pp. 141-142.
457
Non-litigation procedure is regulated in Chapter 17, 18 and 19 of the Civil Procedure Code. In a simple debtor and
creditor relationship, the creditor can file the case in the court and the court will issue a court order to the debtor.
176 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

Table 4. 2 Court Fees paid by KT in the first Instance against its 13 Debtors from 1997
to 1998
Trial Court Value of the Case-disposing Fee for security Fee for Lawyers
claim (Yuan) fee (Yuan) of title execution of Fee*
court orders
l.No.l 28,217,000 151,100 164,450
Intermediate Court
| of City A
2. Ditto 5,148,000 USD 223,670 0
3. Ditto 834,000 USD 44,640 35,160
4. Ditto 58,338,000 301,701 292,220
5. Ditto 21,485,000 117,440 107,950
6. Ditto 2,840,000 24,210 14,720
7. Ditto 12,299,000 75,510 0
8. Ditto 6,746,000 43,740 34,250
9. Ditto 5,061,000 35,320 0
10. Ditto 14,856,000 84,300 74,810
ll.No.2 2,985,000 24,839 0
Intermediate Court
of City A
12. District 649,000 11,510 0
Court in City A
13. Intermediate 18,176,000 100,892 0
Court of City B
Sum 0 1,238,881 723,560 486,560 1,238,881 J
Total amount for
all items 3,687,882 (Yuan)
Source: from a case study presented by Fang, Liu Fang, Research on Litigation Cost, in: China Social Science, (3) 1999, p.
141-142.
since in this case lawyers fee is almost equal to the case-disposing fee, the mount shown above is treated as same as the
amount of case-disposing fee.

In fact, the total cost paid by KT is far more than the amount shown in Table 4.2, since
besides these fees, KT must pay other fees like investigation, travel, etc. In case of appeal,
KT must pay an additional case-disposal fee to the appellate court; additionally, KT must pay
travel costs, accommodation and food expenditures for the judges if the defendant is located
in a different city.458
In Table 4,2, the court asked KT to pay 486,560 Yuan as a compulsory execution fee as the
court viewed that the assets of the debtor should be assessed according to the relevant
458
According to the Civil Procedure Code, if the defendant is located in another territorial jurisdiction, the local court of the
defendant will have the priority of jurisdiction of the case. In this case, KT company must file the claim in City B to sue the
defendant who is located in mis city.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 177

regulation and law. The assessment company charged 0.8% based on the value of the assets

and deducted the amount from the income of the auction. In this case, the assets were still not

sold as of January of 1999. According to KTs accountant, the execution fee of 486,500 Yuan

was not reimbursed by the court.

Though KT has won all the cases, the possibility to be compensated through the application

for compulsory execution of the assets is small, since the debtors were all state-owned firms

that were heavily indebted; there were few assets available for liquidation. In Table 4.2, 7

cases, namely items 1-5, 8, 12 were settled by compulsory execution of court orders. The

total amount of the claims applied by KT were 171.70 million Yuan, but only 430,000 Yuan

was liquidated through execution, whereas KT paid 1,380,310 Yuan in court fees and

execution fees for these 7 cases, therefore, KT company could save a loss of 950,310 Yuan if

it gave up litigation.459 Even if the company is successful in redress, this case indicates that

high litigation costs which are often incurred are beyond the limit of burden of many big

firms.460 If the litigation has no value in terms of economic meaning, then it loses its legal

value. As it is known, law enforcement has become an obstacle of the judiciary. There are

large amounts of cases which cannot be executed and in which the parties are unable to be the

compensated for even if the cases are judged in their favor, especially cases with economic

disputes.

459
Why KT Company took legal action against its debtors although he knew that he could save the litigation cost if he gave
up? The explanation is much to do with the ownership and governance of the state company. As KT is a state-owned
financial institution, KT should prove that the company had no engagement of corruption in the loan business; to prove mat,
it needs a court document for accounting purpose to offset the debt. Of course, the reason behind this case is not purely for
justice or repayment of the loan. If KT were a private firm, then it would never pay such high cost for a court document just
for accounting purpose.
460
There are many cases with litigation fee over million Chinese Yuan. In the selective cases edited by the Supreme People's
Court, civil litigation is a very costly game. For some examples: the first example concerning a real estate dispute, a firm in
Hainan province paid 0.6 million Yuan for Case Disposition Fee, security of title in the first instance and case-disposing fee
in the appellate stage. The litigation was estimated to be 1.5 million Yuan taking the lawyers fee, traveling cost and other
expenditure into account. In the second example concerning dispute of leasing contract, United Leasing Company paid 0.S7
million Yuan as court fee to the trial court and appellate court respectively, besides, court fee for counter-claims was 241,059
Yuan. In the third case concerning bond business, the South Portfolio Company paid total amount of 999,440 Yuan to the
trial and appellate courts for a simple case with a debt value of 27 million. Details refer to "Selective cases of economic
disputes with appeal and retrial disposed by Supreme People's Court", pp. 331 - 335,423.
461
According to statistics, more than 50% of the court orders relating to economic and contract issues cannot be executed
and the creditors have no chance to be compensated even they win the cases. See Zhang, Wei Ying / Ke, Rong Zhu, 'The
adverse selection in civil litigation and its interpretation - an empirical study", in (2) 2002 China Social Science, p. 31.
178 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

III. Critical Assessment of the Current Cost Scheme in Civil Process and Accessibility of
Justice

L The Problem in Prepayment and Reimbursement of Court Fee and Litigation Risk

a) Prepayment and Procedural Right


The parties may be allowed to pay the litigation fee at a later date or be exempt from
litigation fees in case of 'financial difficulty".462 In reality, the law neither indicates the
responsibility of the courts in legal aid nor the rules on how to define "financial difficulty"
and when the exemption shall be decided. According to current practice, it is difficult for the
parties to apply for legal aid from the courts.
Civil Procedure Code stipulates that the courts must accept the filing if the filing complies
with all legal conditions, prepayment of court fees is not mentioned.463 However, in its legal
interpretation in 1994, the Supreme People's Court further stated, "it is a precondition for the
court to accept the case that the claimant or the appellant pay case-disposal fees or appeal
fees. In the event that the parties does not pay the above mentioned fees, or does not pay the
full amount, or does not pay if the application for deferred payment / reduction of payment /
exemption is not approved, the court shall not accept the filing and dispose the case, the case
shall not come into the litigation procedure".464 Additionally, Article 12 of the Regulation on
Litigation Cost (1989) promulgated by the Supreme People's Court stipulates if the litigant
and the appellant cannot prepay the litigation fees, then the case will be treated as
"automatically withdrawn". As for the claimant, he/she may continue to file with the court
when he/she has enough financial ability, but for the appellant, he/she may lose the right since
the time limit for appeal may expire. For the counter-claimant, he loses the time and ability to
defend his right. The inability to prepay the litigation fee does not mean that the parties give
up the right and withdraw the case; therefore, the court seems to deprive the claiming right of
the parties only because the parties are not in a position to pay. With respect to the appellate
case, the case will be treated as "automatically withdrawn" when the appellant cannot prepay
the fee to the court and may lose the chance to win the case.465

462
Art. 107 of Civil Procedure Code. (1991).
463
Art. 108, 109, 111, 131, 140. of Civil Procedure Code (1991).
464
The Supreme People's Court: "Reply to Questions about Litigation Fee", 1994.
465
Among the 76 court decisions/orders from 1993 to 1996, 8 court decisions were regarded as "automatically withdrawn",
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 179

Such regulation on the collection of litigation fees reveals that the courts only bear public
costs and that the courts do not take the risk of bearing the private costs.
The regulation and legal interpretation of the litigation fee by the Supreme People's Court has
blocked those who are unable to pay the fee to the court. In the absence of other dispute
resolution mechanisms like legal aid, ADR, mediation; such regulation would be a big loss to
the society, as no remedies would be available to the parties.

b) The Risk of Losing Case Disposition Fees


Under current civil procedure, the litigant, or the appellant, must consider the risk of losing
the litigation fee as the court and the parties are not aware of whether or not the amount of
compensation will be equal to the amount of claim. If the compensation is smaller than the
amount of claim, then the fee paid by the respondent will only be calculated based on the
amount of compensation, thus the amount of the fee reimbursed by the respondent will be
less than the prepaid amount, the rest is absorbed by the court. In such a situation, the
compensation obtained by the litigant may not cover the litigation fee which was prepaid. For
example, if the litigant claims 1,010,000 Yuan, and he has to pay a litigation fee of 15,059.97
Yuan in accordance with the cost calculation. It is possible that the compensation ruled by the
court is however only 10,000 Yuan, then the respondent will only have to pay 410 Yuan based
on 10,000 Yuan (compensation amount), the rest of the prepaid amount, 14,649.87 Yuan, will
be kept by the court and will not be reimbursed to the litigant. Therefore, if the parties are
unwilling to bear such unforeseeable risk, he/she may give up the right of being fully
compensated to avoid paying additional costs to the court.
In another case, the litigant overestimated the "dispute value" and the compensation obtained
was not even enough to cover the litigation fee.466 The litigant drove a Toyota car into a wall,
and the air bag failed to function at the time of the accident. The litigant sued the carmaker
for 1 million Yuan in 1993. In 1994, the court ruled that the description of the air bag was not
detailed enough and the defendant should pay 13,685 Yuan to the litigant. In this case the
defendant paid the litigation fee of 557 Yuan and the litigant paid litigation fee of 14,403

see selective cases published by Economic Tribunal of the Supreme People's Court, No. 100 Economic Tribunal, 1994 and
No. 159 Economic Tribunal 1995.
466
See, "J.T.Zhang sue Toyota for compensation due to personal injury", in: Case collection selected by Supreme People's
Court, China Politics & Law University Publication, 1997, pp. 98 - 104.
180 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

Yuan. In addition, the litigant paid 25,000 Yuan to the lawyer for representation. In such a

case, the litigant could have avoided the loss of 26,302 Yuan if he had not lodged the claim.

The litigant may run the risk of being unable to recover the fee even if he/she wins the case.

In accordance with the Civil Procedure Code, the litigation fee shall be borne by the losing

party; consequently, compensation will include the litigation fee. In practice, the fee shall be

prepaid to the court, but will not be returned to the winning party directly. The litigant has to

recover it from the respondent, very often through compulsory enforcement, further incurring

an execution fee to the parties when he/she applies for compulsory measures to be taken to

liquidate the property of the losing party. In such a situation, the court shifts its responsibility

to collect the fee from the losing party to the winning party. In the event that the losing party

has no property available, or the court is unable to seek out the property of the losing party,

the remedies for the prepaid litigation fee and the rights from the judgment will not be

realized. Such practices by the courts face strong criticism in China. Since the 1998 reforms

in some courts have been made to reimburse the prepaid court fee directly to the litigants who

win the case, although it is still not common.467

In a case filed in 1994, the litigant filed a claim against the defendant for damaging his

reputation. The litigant prepaid a 1,450 Yuan litigation fee. The defendant was found guilty,

but the original court decision was reversed after the defendant appealed to the High People's

Court; consequently the appeal fee should have been borne by the original litigant (the losing

party), but as of 1998 the litigant had not paid the defendant the 1,450 Yuan court fee. The

defendant thus has not been able to get reimbursement of the fee prepaid by him to the

appellate court. Additionally, he had to bear the other costs which were incurred, such as

transportation costs and losses due to absence from the work, which was around 1,000 Yuan.

In this case, the duration in the court case of the first instance and the appellate court

exceeded 2 years and the winning party was unable to recover the prepaid fee and

compensation.468

These examples indicate that the design of collection of court fee is not rational and it should

be revised to convenience the parties to have legal remedies within reasonable time limits.

467
For relevant arguments, see H.Y. Jia, H.Y. Li, "Improper way to absorb court fees from the winning party", in People's
Court Press, on 07.01.1998; "Method of Reimbursing Court Fees, Reform in Le Qing Court", in People's Court Press, on
16.06.1998.
468
In: Selective Cases from People's Court, 17th edition, pp. 77-83.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 181

The court should not shift the risk to the winning party for collection of the litigation fees

since the courts are in a better position to recover the litigation fees by using its' discretionary

power.

Z High Cost of Non-Litigation Cases

Non-litigation cases refer to those civil cases, in which there is only one party involved, or

the other party cannot be identified, or there is no need to have the other party involved in the

case.469 The court fee for such cases is only approximately 2% of the litigation cases.470 In

Japan and Taiwan, the scope of non-litigation cases is wide. For example, it includes the

compulsory execution of security titles,471 dissolution of corporations, settlement and

reorganization of corporations,472 judgment on buy-back prices in case of disagreements on

mergers,473 confirmations and compulsory executions on promissory checks. Compared with

litigation cases, the court orders in non-litigation cases provide another form of legal remedy

besides civil procedure and reduce unnecessary litigation cost.

However, in China the scope of non-litigation cases is too narrow in legislation. In

accordance with the Chinese Civil Procedure Code, there are only 4 types of cases defined as

non-litigation cases as stipulated in the Civil Procedure Code, namely, cases concerning

property with absence of ownership, debt, loss of check, and bankruptcy procedure are filed

under non-litigation procedure. In reality, for bankruptcy settlement, a litigation fee still will

be charged in accordance with the 'dispute value'. Although the Supreme People's Court

regulates that only 100 Yuan is charged for each case filed under special procedure,474 in

practice the courts are not satisfied with such small fee amounts compared with the court fees

charged in accordance with the Regulation on Litigation Cost (1989) based on 'dispute value'

and therefore always charge additional court fees 475 and violate the regulation. Many

469
The non-litigation procedure is regulated in Chapter 17, 18 and 19 of Civil Procedure Code.
470
In Taiwan, for example, for a case disposed in the first instance with "dispute value" of 6 million Taiwanese Yuan, the
court fee will be 60,000 Taiwanese Yuan; whereas for a non-litigation case disposed with the same "dispute value", the court
fee amount only to 1,113 Taiwanese Yuan, which is approximately 1.8% of the court fee under litigation procedure. See, Art.
2, Taiwan "Litigation Fee Act for Civil Cases", Art. 102, "Non-Litigation Case Act".
471
See, Art. 71, Art. 100, Art. 101 of Taiwan "Non-Litigation Case Act".
472
See Art. 81-96 of Taiwan "Non-Litigation Case Act"; Chapter 1,3 rd Edition of Japan "Non-Litigation Procedure Law".
473
Art. 187, 317 of Taiwan "Corporate Law", Art. 81 of Taiwan "Non-Litigation Case Act"; No. 3 of Art 254 of Japanese
"Commercial Law" and Art. 126 of Japan "Non-Litigation Procedure Law".
474
Art. 132, 134 of "Opinion of the Supreme People's Court on Litigation Fee".
475
In an example reported in "Shanghai Legal Press", two Bank checks were stolen and the firm announced publicly
182 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

non-litigation cases are converted into litigation procedure and court fees are collected

according to the standard of litigation cases.

3. The Cost of Realizing the Right of Mortgage

A high cost is incurred in liquidating security of title. The effectiveness of the Security Act in

October 1995 and the Auction Act in January 1997 is a further reform in the legal system in

China, which was intended to promote economic exchange and economic efficiency, but the

realization of mortgage rights incurs a very high cost to the creditor. According to the

Security Act, it is not legally effective for both parties to agree in advance, that the ownership

of the mortgaged subject will be transferred to the creditor if the debtor is unable to pay the

credit back.476 The disposal of the subject can only be made after the debtor is unable to pay

the debt due. In case of the debtor's failure to pay the debt due and rejection of reaching an

agreement with the creditor on how to sell and auction the mortgaged subject, the creditor

must first go to the courts for litigation. The compulsory execution will then be made after the

judgment.477 The sale of the title will not be conducted by the court directly, it must be first

assessed by a asset-assessment company appointed by the court and then put up for auction

through an auction company. In such a long and complicated procedure, the creditor must pay

a litigation fee, an assessment fee, an auction fee, and a fee for compulsory execution, thus

the total cost of realization of the mortgage is great in this respect.

If the concerned title of the mortgage is a "state owned asset", the assessment must be done

even before the mortgage, and it must be done again in case of auction. The procedure of

assessment must go through complicated procedures by government authorities.478 The fee

paid to the assessment company is similar to the fee paid to the court based on the "property

through the court. The court fees, as per "Opinion of the Supreme People's on Litigation Fee", should be 100 Yuan for
supervision, and 600 Yuan for the public announcement. But when the date for announcement expired, the court asked the
firm to pay 20,548 Yuan according to "Regulation on Litigation Cost (1989) ", otherwise the bank checks would not be
released. As a result, the actual court fees incurred were over 200 times of the court fees charged under non-litigation
procedure.
476
Art. 40 of Security Act
477
Art. 40, 53 of Security Act; Art. 207, Civil Procedure Code (1991).
478
The procedure includes feasibility research, approval, and confirmation through the firm, the local government, and the
State Assets Management Committee, asset-assessment firm. The work of assessment is a specially-approved business and it
is very common to have more than 2 firms involved in the assessment, each firm may be only granted to assess some of the
items such as patent, trademark, portfolio, real estate.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 183

value" 479

Such a complicated and lengthy procedure in the security business incurs not only a high cost

to the creditor, but also delays in providing speedy redressal for he litigant.

4. High Transaction Cost in Bankruptcy Procedure

There exists a high transaction cost in the bankruptcy procedure with respect to duration and

cost. The procedure of liquidation of the bankrupt firm is the same as the procedure for

security of title. In case of liquidation, settlement fees shall be paid first.480 In many cases,

after deducting various fees, the remaining value is even insufficient to cover the cost

incurred by the court, the law firm, audit firm, assessment firm and the auction firm.481 The

creditors (mainly the banks) have little possibility to be compensated. For example, 111 firms

in Liao Nin Province went bankrupt during the years of 1995 and 1996, the creditors of the

88 firms did not have any cash available from the bankruptcy, only small proportions of the

assets were available from the 23 bankrupt firms. The lowest proportion of assets available

was 0.0075% of the amount of credit and the highest was 8.4%. Due to the various costs

incurred in the process, the compensation available to the creditors is normally very small. As

reported, in a bankruptcy procedure against a fertilizer firm in Hu Bei Province, the cost

charged by authorities, mostly as mentioned above, was more than 1 million Yuan, which was

17% of the total value being assessed, 90% of the creditors (without priority in the

compensation scheme) have little chance to be compensated after the cash or assets are

distributed to the authorities and creditors with priority.482

Furthermore, in the case concerning security of title and bankruptcy, these non-litigation

cases are often changed into litigation cases in case of disputes among the parties. The civil

process is lengthy and incurs high costs to the parties involved. Following complicated

assessment procedures in the name of strict administration by the local government, various

479
For example, in a mortgage agreement of 1 million, the fee for assessment is around 15,000 Yuan.
480
The fee paid for liquidation of the assets.
481
It is therefore a contradict and an inefficient solution if the transaction cost for bankruptcy procedure is too high. On one
hand, if the firm applies for bankruptcy, the remaining asset will be used up to pay different costs in bankruptcy procedure;
on the other hand, if the firm does not apply bankruptcy procedure, the assets of the firm may fade out.
482
See "Investigation Report on Merger and Bankruptcy in Some Provinces and Cities (1996)" by the State Economy &
Trade Department & Bank of China: in: Handbook for Optimizing Capital Structure in Cities for Test, China Economy
Publication, 1996, p. 291.
184 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

fees have to be paid to the relevant authorities such as the courts, the assessment firms, the
auction firms and the law firms. Such complicated procedures and regulations can be
explained as rent-seeking behaviors of these parties, as the assets should be used to
compensate the creditors, mainly the banks. These regulations and complicated procedures
will only increase transaction costs to the society and the market economy, but do no benefit
the market itself.

5. Fees in respect to Application for Security of Title and Law Enforcement

In case of application for security of asset, the fee is calculated based on the value of the
asset483 and the fee must be prepaid, otherwise the court will take necessary measures to
secure the asset. All costs incurred in the investigation, lien, safekeeping and the cost of the
guarantor will be on the account of the applicant. Thus, the cost incurred will be far higher
than the application fee.
With respect to execution of judgment, the fee is calculated based on the value of the asset as
applied by the applicant. In practice, some courts collect the fee before the execution and
some collect the fee after the execution. The actual cost will be much higher if the
enforcement further requires assessment of assets and auction.

6. Lawyer's Fee

a) Legal Service in China


Lawyer's fees are a disputable issue in today's litigation process. On one side, there is a
tendency of increased filings and as a result the need for legal service is increasing. As most
of the people still lack adequate legal knowledge to conduct the civil procedure, legal service
is therefore very important for the protection of the procedural and substantive rights of the
parties; on the other side, lawyers' fees have scared poorer parties who simply cannot afford
for the service.
In the civil process in China, lawyers' engagement is still low. In 1991, among the 2,448,200
cases filed in the courts of first the instance, only 9.4% (226,900 cases) were engaged with
483
Art. 8 of Regulation on Litigation Cost (1989).
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 185

lawyers; in 1992, among the 2,601,000 cases filed in the courts of the first instance, 15.2%
(396,300 cases) were engaged with lawyers; in 1993, the rate of cases with lawyers'
engagement increased to 16%.484 By contrast, in Japan, where people have also a traditional
fear of litigation, 86.1% of the cases were engaged with lawyers.485
The low rate of demand for lawyers in China is affected by the quantity of the supply and the
quality of the services, as well as the lawyers' fees. First, lawyer, as a profession, was
reestablished in the beginning of 1980's and the availability of lawyers was limited. In 1998
the number of lawyers was 101,220 and among them only 51,008 was engaged in the
profession on a full time basis.486. Lawsuits are often conducted without the engagement of
lawyers. Secondly, the quality of legal services has also affected the attitudes of the general
public towards the legal profession. High quality means high possibility for the parties to
realize their legal rights, and parties will ask for legal service when they foresee the benefit
from lawyers' engagement. Generally speaking, lawyers in China do not enjoy good fame. In
litigation, lawyers' personal contacts and relationships with the courts is very decisive in
many cases. Lawyers also serve as middlemen to bribe judges. As a consequence, if the
lawyer is regarded only as a middleman for bribery, the engagement of lawyers will only
increase litigation costs to the parties involved. The moral crisis, bribery, cheating and
malicious competition among the lawyers have heavily hurt the reputation of the profession
in the past few years. Third, lawyer as a profession does not monopolize the sector of legal
service as all procedure law in China allows individuals to represent the parties in civil
process,487 thus the parties rely less on the legal service provided by the lawyers.

b) Method of Charging Lawyers' Fee


The method in charging fees against the parties involved in the cases can be summarized as
follows:
a. Per case principle
b. Per hour principle

484
Source compiled from China Law Year Book, 1995.
485
Hirto Miyake, Comparative Analysis of the Reform of Civil Procedure, Japanese Report, in Conference on Civil Justice
in the Era of Globalization, Japan 1992.
486
Source: China Judicial Administration Year Book, 1999, China Law Press 2000, p. 579.
487
Art. 56 of Civil Procedure Code (1991).
186 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

c. Fixed charge principle


d. Per value principle (2~~8%)
e. Per agreement
f. Reasonable share of some costs when litigation takes place in other places.

The standard of lawyer's fees is based on the Regulation on Lawyers' Fee and Standard of
Lawyer s Fee promulgated in 1990. The previous fixed rate is regarded as too low and would
frustrate the legal service, thus in 2000, a directive was promulgated488 to allow the local
judicial administrations in the provinces to set their own standards according to the economic
development of the regions and the demand/supply of the local market. Table 4.3 reveals
local regulations on the standards of lawyers' fee in Fujian, Shanghai, Shengzhen, and
Shangdong provinces. According to the new regulation, lawyers can charge fees based on the
local standards and the economic status of the parties. The fees can be flexible but must be in
line with the directive.
For example, in Fujian Province, a new regulation489 has been effective from l ft of April
2002. Lawyers can charge lawyers' fees according to local regulations. The rate can be based
on per case, 'dispute value', per hour, or in accordance with the agreement made by the
lawyers and the parties involved. The fees shall be in line with the guiding rate as stipulated
in the regulations. Furthermore, it allows the lawyers and the parties to negotiate the rate
according to the market.

According to Table 4.3, lawyers can charge rates below the limit as stipulated by the local
judicial administrations. However, high rate lawyers' fees are an obstacle for 'access to
justice' since the cost is a great burden to the litigants. The charge of 1,000 Yuan
(approximately US$121) or more per hour is unbearable for the litigants when taking the
average income of most people into account.490 For many people with incomes below 2,000
Yuan in China, such high rates are criticized by most of the people as too high and
unacceptable. Therefore, a reasonable cost scheme should take the income level of the people
488
See Notification on Temporary Standard of Lawyers' Fees to be regulated by the Local Administration, by the State Plan
and Development Committee and the Ministry of Justice, 2000.
489
Regulation on Lawyers' Legal Service and Fees in Fujian Province, on 1* April, 2002.
490
Xiamen Daily, 'Today's Focus', p. 3,22.08.2002.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice ]V7_

into account and meanwhile legal aid should be granted to the poor to obtain legal service.

Table 4.3 Lawyer's Fees regulated in Fujian, Shanghai, Shengzhen, Shangdong


Case / Type/Region Fujian Shanghai Shengzhen Shangdong

Criminal cases Investigation < 3000 or per hour <2000 2000 -10,000 50-1000
(Yuan/Case) Phase
Litigation Phase < 3000 or per hour <4000 2500 -12000 500 - 3000
Judgment Phase < 8000 or per hour <8000 3000-15,000 1000 - 6000
Civil Cases Non-Property 500-3000 <5000 2000 - 5000 500-5000
(Yuan/Case) related
'dispute value' 500-3000 <2% 3000 - 5000 <4%
under 100,000
Yuan
100,000 - 1 <2.5% <1.5% 2.5% - 8% 3%
million Yuan
500,000 - 1 2% - - -
million Yuan
1 million 5 1.5% <1% 1%
million
5 million - 10 1% <0.75%
million
10 million - 50 0.5%
million
Above 50 0.25%
million
Administration Non-property 500 - 3000 <5000 1500 -15000 500 - 3000
Cases related
(Yuan/Case) Property related As per the standards in civil cases (property related) |
Fee Per hour Min. 100 Max. 3000
(Yuan/Per hour) Max. 1000

Source: Comparison of Lawyers Fees, in: Xiamen Daily, 22.08.2002.

The above study indicates the high litigation costs incurred in the civil process and that the
parties involved are burdened by the various cost of litigation. Lawyers' fees appear to be
high considering the income level of the people in China, partly contributing to the shift of
burden of proof to the parties in recent procedural reform by the courts in order to relieve
workloads and expenditures in investigations. This raises the question: are the courts in a
budget shortage and thus rely heavily on the income from charging the litigation cost? To
188 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

answer this question, the following is an attempt to analyze the budget supply of the courts
based on the data available from the High Court of Jiangxi Province.

IV. A Survey of Judiciary Budget in Jiangxi Province

The input of the state in its judicial system will strongly affect the efficiency and output of
justice. To guarantee justice for the people, the state should invest more in the legal system491
The problem of budget autonomy in Chinese courts is serious. According to one investigation
made by a people's representative, of 1,423 courts (39.98% of the total courts in China), most
are county courts and District Courts, have problems providing a stable salary to personnel.
122,403 persons could not be paid their salary on time.492 Many local administrations cannot
provide enough of a budget to the local courts due to financial stress. The budget shortage is
one of the reasons that courts always charge additional cost to the parties and create more
rent-seeking and corruptive activities. Moreover, lower courts cannot undertake reform
measures in administration, case flow management and establishment of computer systems,
and personnel management due to the shortage of budget. The efficiency of the courts cannot
be improved given the current conditions.
In this context, based on the data from the High Court of Jiangxi province, this part is to
analyze the input of the state and to investigate whether or not the supply from the state is
adequate to secure minimum justice and to what extent the judicial cost (in case of
insufficient input) affects the duration of the courts.
A well-functioning judicial system will incur high judicial costs arising from judicial
activities, investment in facilities of the courts, personnel and operating costs in connection
with the jurisdiction. It has been a problem in China that the courts have to rely on the fiscal
budget arranged by the local governments493. In reality, the budget appropriated by the local
administration is normally insufficient for the operating of the court system. To cover the
judicial cost, the courts have to rely on the income of court fees charged to the litigants.
However, for most of the courts, the local budget and the income from litigation fees cannot

491
Schaefer H.-B., Kein Geld fOr die Justiz - Was ist uns der Rechtsfrieden wert", in DRiZ, 1995, p. 461.
492
Investigation made by Gu, Zhao Sheng, Report from Lower Courts, in People's Court Daily, on 14.03.2002.
493
According to the Chinese Budget Act, the local government in each hierarchy shall keep the balance of its budget.
Therefore the local courts depend mainly on the budget appropriation of the local governments.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 189

cover the expenditure of the courts. Such problems are obvious in many provinces where the

fiscal income is low and economic development is still backward compared with the

provinces in the coastal area.

The shortage of judicial costs strongly affects the speed of the trial and may lead to court

delay and low quality of judiciary.494 The following is to illustrate the problem of the

judiciary budget from the central and local governments based on the data available from the

High Court of Jiangxi Province and analyze how the judicial costs could affect justice and

efficiency of the courts.

1. An Anatomy of Income: Budget, Non-budget Income and Expenditures

The income of the courts mainly comes from the appropriation of the local governments

(budget income) and the charging of litigation fees (non-budget income).

As indicated in Table 4.4, during the 4 years from 1997 to 2000 the fiscal appropriation

(budget income) for the courts in the whole province increased by an average of 28.63%

annually, non-budget income (mainly litigation fees)495 increased by an average of 3.71%

annually, the average increase in total income was about 12.93% annually; compared with the

annual average increase of 10.35% of the courts' expenditure, the increase rate of income was

2.58% higher than the increase in the expenditure.496 However, the income still cannot cover

the expenditure of the courts, in the four years from 1997 to 2000, expenditures and income

had an average gap of 5.66% despite the increase in budget supply for the local governments

and the non-budget income. The sum of the gap was normally the debts relating to

construction of court buildings, vehicles and communication equipment. The creditors were

normally the construction companies and the local banks.

494
The cost-saving policy of the state in judiciary with respect to lower budget and less personnel would endanger the
quality of judiciary and cause a longer duration of civil process. See: Franzen/Apel, Prozessaufwand bei Gericht und Anwalt
- betriebswirtschaftlich und anschaulich - mit Folgerungen, NJW 1988, p. 1062.
495
Such income mainly comes from the litigation fees, confiscations, fines, etc..
496
Thefiscalincome increases 10% in average each year in this province.
190 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

Table 4.4 The Operating Cost of the Courts in Jiangxi Province from 1997 to 2000
Currency Unit million Chinese tfuu

1 Fiscal Fiscal Oihar lacuna Operating Expenditures The tap

Yaar Apprapriatieii Incama / Total batwtan tha


Personnel Administration Costs in Construction Total
/ Non-budf* total incoma

Bodfat Income Coits Costs Connection Costs Expcnditiira and total

loconw txpandicwa
with

judgment

1997 64.512 123.00 117512 57.177 40.721 74.593 35.769 208.26 -20.748

1998 79.09 142.188 221.271 69.376 4958 77.539 38.70 235.195 -13.917

1999 971854 163.043 260JJ7 86168 54.20 86.084 37.555 264.007 -3.11

2000 136718 131.849 2(8.567 113.133 54056 102183 10.165 279.537 -10.97

Source: compiled from the data from the High People's Court of Jiangxi Province497

Non-budget income, mainly from the charging of litigation fees, plays an essential role for
the functioning of the courts since this part of the income consists of a big proportion of the
total income of the courts. Table 4.5 reveals the proportion of income in the courts of Jiangxi
province.

Table 4. 5 The Proportion of Non-budget and Budget Income of the Courts in Jiangxi
Province
Year Budget income Non-Budget Total Income Percentage of Percentage of

(million Yuan) Income (million Yuan) Non-budget Budget income

( m i l l i o n Yuan) income

1997 64.512 123.00 187.512 65.6% 34.3%


1998 79.09 142.188 221.278 64.3% 35.7%
1999 97.854 163.043 260.897 62.5% 37.5%
2000 136.718 131.849 268.567 49.1% 50.9%
Source: compiled from data from High People's Court of Jiangxi Province4

497
See Investigation Report of Budget Guarantee of the Courts in Jiangxi Province, by Xue, Jiang Wu and Zhang, Yong
Ling (High People's Court of Jiangxi), in: People's Judiciary (8) 2001, pp. 37-40.
498
Ditto.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 191

The table shows that the non-budget income (mainly from litigation fees) had a big

proportion in the total income. The proportion was 65.6% in 1997, 64.3% in 1998, 62.5% in

1999 and 50.9% in 2000 respectively. This result shows that the courts are heavily dependent

upon the income from litigation fees for its daily operations, in the meantime, it reveals

another problem, namely, that the budget from local governments is low and the litigants are

heavily burdened in the civil process.

2 The Effect of Law Budget

The investigation in Table 4.4 and Table 4.5 shows that the fiscal budget cannot cover the

actual expenditures. The courts sometimes even cannot pay salaries and other benefits to the

personnel in time. In general, the fiscal arrangement from the local governments can only

secure the basic salary, whereas the position subsidy and medical insurance have to rely on

the non-budget income. At the end of 2000, of 112 courts of the province, 87 courts (77.68%

of the total courts) didn't have enough money to pay employee salaries due; among which 77

courts (68.75% of the total courts) could not pay the subsidy and allowances due, 10 courts

(8.9% of the total courts could not pay both the basic salary and the subsidy/allowances due;

3736 persons were affected by the shortage of budget in the lower courts of this province.499

In addition, due to the shortage of budget, the functioning ability of the courts is weakened.

For example, normally the administration costs of the courts shall be higher than those of

local administrations,500 but in the fiscal budget this part is not sufficiently appropriated,

especially in the lower courts like district courts and county courts. The average expenditure

per person is around 34,000 Yuan/Year in High People's Court, 30,000 Yuan/Year in the

intermediate courts and even less than 20,000 Yuan/year in the district/county courts (this

average is far below the average level for the whole country). Among the 100 lower courts,

only 9 courts have the average expenditure of more than 25,000 Yuan/year, with which the

normal running of the courts can be guaranteed; 30 courts have an average expenditure of

499
The courts lacked 13.98 million Yuan to pay these costs. See Xue, Jiang Wu and Zhang, Yong Ling, An analysis and
thinking of the problem of court budget, in People's Judiciary (8) 1999, p. 39.
500
Normally the administration cost shall double the cost of the local government administration body, since the courts have
to deal with much more documents, mailing and organization etc..
192 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

nearly 20,000 Yuan/year and the operational cost is very tight in these courts. 61 courts have

an average of less than 16,000 Yuan/year. The tight budget has impeded the courts' capability

to dispose cases.501

Furthermore, the fund for the construction of court buildings and facilities for most of the

courts does not come from the fiscal budget of the local governments, but from other sources

of income (litigation fees, loans from banks). In the whole province, only 7% of the courts

receive funds from fiscal appropriation by local governments.502 Poor office facilities,

insufficient court tribunals and backward communication equipment in most of the courts

have affected the filing process and the judgment speed.503 Insufficient fiscal supply to the

courts with respect to office building, vehicles, communication systems, and uniforms is the

main reason for the courts' debts. Most of the courts are unable to pay the costs of

construction of court facilities (mainly the court buildings) to the construction companies.

90% of the debts of the courts are related to the construction of office buildings. According to

the statistics, the court system the province owes a debt of US$120 million Yuan.

3, The Allocation Problem of Fiscal Budget and Non-budget Income

According to the regulation referred to as "income and expenditure in separated account",

litigation fees charged by the courts shall be turned over to the financial department of the

local government and will be re-allocated to the courts according to the situation of the courts

in combination with the fiscal budget, but in reality the fiscal budget is not enough to cover

501
Supra note 499.
302
Ditto.
303
Some courts even had to rent office building. Many courts, especially the county courts, face great difficulties in judicial
work due to the lack of office building. In the investigation, Xunwu Court rented office building for long time, although the
architecture design for their office building was ready, no money was available for starting the constriction. The construction
of the office building of the court in the Fuliang County has been undergone for many years, but it was interrupted due to the
lack of money and debt owed to the constructing firms, amounting to 100,000 Yuan. The construction of office building of
the court in Xishan County took 10 years and was completed at last with the collected money from the judges and employees,
but the collected money could not be repaid yet. With respect to the court uniforms, 86% of the courts did not have the
money to change the old uniforms in the year of 2000. The total debt of the courts (including lower courts and Intermediate
People's Court) in Ganzhou City reached an amount of 11.13 million Yuan. On the other hand, most of the courts hadn't
enough vehicles and communication systems. The backward facilities cannot meet the requirement of high efficiency
required for the judicial work.
This means that the income from litigation fees, the fines, and confiscations, etc., shall be turned over to the local
financial department via the designated bank; this part of income will be under the capital management in special account
and reimbursed to the courts proportionately; whereas the operational costs of the courts will be appropriated from the local
fiscal budgets.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 193

the daily operation cost of the courts. 74% of the courts in the province rely on the litigation

fees re-allocated from local governments. The sum reimbursed by the local government will

normally be 80% ~ 85% of the litigation fees originally received and transferred by the

courts.505 The sum of the budget and non-budget funds appropriated to the courts is not

enough to cover the expenditure of the courts. There are some adverse effects as a result of a

such scheme: first, to cover the gap, the courts try to find other sources of income by charging

excessive fees which violate the regulations or even accepting donations; in case of travel, the

costs are frequently paid by the parties involved; secondly, bribery and corruption happen

very often and increase additional costs to the parties involved; thirdly, as the returned sum

depends on the amount of litigation fees paid to the courts, thus the courts have the incentive

to increase the amount by receiving more filings, on some occasions, judges even violates

procedural and substantive legitimacy by looking for filings.506

Moreover, problems exist in the distribution of state subsidies. To balance the operation cost

of the courts, the central government and the financial branch of the province increases

special subsidies to the courts to cover the gap. In 1999 special subsidies totaling a sum of

8.10 million Yuan were appropriated to the courts by the central government and the province;

in 2000 the sum increased to 9.60 million Yuan, with an increase of 18.52% compared with

that of 1999. However, this appropriation is somewhat misused. The subsidy is appropriated

by the central government first to the province and then from the province to the local

governments, but at the provincial level, the subsidy is often mixed together with the fiscal

budget as a bundle of appropriation, therefore the courts are not always properly informed

about the time and respective amounts to be appropriated. In some counties, part of the

subsidy is detained by the county governments for other purpose of financial arrangements.

For instance, the courts in Shang Rao and Ying Tan City only received 1.86 million Yuan

from the 2 million Yuan subsidy in 2000, whereas in Jiu Jiang City, only 4 counties received

the full amount, the other counties did not receive the full amount of appropriation.507

According to the regulation issued by the Supreme People's Court, 70% of the litigation fees charged by the courts shall
be turned over to the financial department of the local governments and should be repaid to the courts according to the
situation of each court
506
Zhang, Wei Ping, Review on Judicial Reform, China Judiciary Publication, 2002, Vol. 4, p. 154.
507
In the investigation, the subsidy for 3 counties were severely discounted, in one county (Xingzi) only 290,000 Yuan of
the 600,000 Yuan was appropriated by the financial branch of the local county government.
194 Chapter 4 A Survey of Litigation Cost, Court Budgets and Access to Justice

4. Low Budget and Accessibility of Justice

From the empirical study it is obvious to see some consequences of the shortage of financial

supply in judicial activities. The shortage of budget for the courts has affected the daily work

of the jurisdiction. For those lower county courts and some village tribunals, due to bad

facilities, simple offices, lack of personnel and travel fees, cases were often delayed or just

settled without careful investigation. It is unlikely that quality of the jurisdiction can be

guaranteed and justice be assured.

According to statistics, the courts in Jiangxi province had a deficit of 3.87 million Yuan in

travel costs in 2000 and 2.2 million Yuan in medical insurance for the court's personnel. The

low level of income coupled with disqualified social welfare and an overload of work have

diminished the enthusiasm of the judges. Judges have different income levels in different

provinces, regions, hierarchies of the courts. Low salaries in the poor provinces may increase

rent-seeking or corruptive behavior.

The absence of budget autonomy further leads to localism of jurisdiction, since the courts

have to rely on the budget from the local administration and the level of budget is dependent

upon the development of the local economy, consequently, the courts are inclined to protect

the local economic interest in its jurisdiction and on the other side the jurisdiction is easily

and unavoidably interfered with by the local administration. Under such circumstances, it is

very difficult to realize judicial independence and justice in the judiciary, as well as the

uniform rule of law.

V. Findings and Suggestions

In this chapter an investigation was made of the problem of litigation costs, which includes

various court fees and lawyers' fee, as referred to as private cost, and an empirical study on

the problem of judicial cost, referred as public cost, based on the investigation of all of the

lower courts in Jiangxi Province.

The civil process in China incurred high costs. In the litigation, the parties normally have to

consider at least 15% ~ 20% of the claimed amount to pay court fees and lawyer's fees, etc.

High process costs impede the accessibility of justice and diminish the value of judiciary.
Chapter 4 A Survey of Litigation Costs, Court Budgets and Access to Justice 195

The operation of the justice apparatus relies heavily on the income from court fees. As

indicated in Table 4.5, non-budget income, mainly from court fees, shares more than 60% of

the total income. In a state rule of law, it is necessary to reduce the burden of the litigation

and enhance accessibility of justice, but under the current financial capabilities of the state

and the local governments, it is very difficult to shift part of the litigation cost to the state by

increasing the local budget and state subsidies. Reduction of litigation cost will affect the

functioning of the courts since court fees are still the main source of income of the courts

under the current budget arrangement.

Furthermore, low budget appropriated by the local governments and the reliance of budget on

local governments result in a low level of income and social welfare. Low income levels of

the judges further frustrates the enthusiasm of the judges. In such an environment,

rent-seeking behavior, corruption and localism in jurisdiction are more likely to happen, for

instance, the courts will have incentive to charge additional litigation costs from the parties

and thus increase the burden of the parties. The shortage of budget may further have an

impact on the daily judicial work of the courts and causes delay in the courts.

The reform should be aimed to provide sufficient budget to the judiciary and reduce the

burden on the parties so as to improve accessibility of justice. It is necessary for the state to

provide more financial support to the courts especially in provinces which have

comparatively less fiscal income. Put concretely, more financial support and salary increases

should be considered for the courts.


196 Chapter 5 The Problem of Enforcement of Judgments by the Court

Chapter 5

The Problem of Enforcement of Judgments by the Courts

If substantive law is adapted and continued according to technical and economic growth, if approaching

the courts is easy, and if the procedures are fair and fast and law enforcement is swift, then all these

factors would lead to comparatively low costs in using the market and enable, in many cases, the

emergence of markets which do not rely on trust and reputation, but are based on anonymous transactions.

If these conditions are missing, the use of the market will be cumbersome and the decisions for allocation

of goods have to be made to some extent by other institutions like hierarchies or political processes in

which otherforms of transactions costs will surface.508 (Schaefer)

I. Introduction

Law enforcement, as the last stage of the civil procedure, not only directly affects the rights
of the parties, but also the respect for law and the authority of the courts, as well as social
stability and economic development. The goal of judgment is to define legal rights among the
parties, whereas enforcement of court orders is to realize legal rights, from this point of view,
enforcement procedure is the continuation of trial procedure. Law enforcement and its
legislature forms an important part of the civil procedure law. The realization of legal rights
by law enforcement not only concerns the functioning of the courts, but also the protection of
legal rights and the authority of the judiciary.
This chapter investigates the problems existing in law enforcement in China. The study will
first address the organization of law enforcement in China and the reasons for, as well as
difficulties in, law enforcement. It is publicly known that law enforcement has become the
most serious problem in the judiciary and has been a bottleneck for legal development in

508
Schaefer, H.-B., The Significance of a Well-Functioning Civil Law in the Process of Development, Paper presented at the
Conference of the Latin Americans Law and Economics Association in Quito (Ecuador) June 15* to June 17* 1998,
Manuscript, 1998, p. 4.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 197

China. As old and new problems overlap under the market economy, the problem of
enforcement becomes a long-lasting and troublesome problem facing the courts. Often,
people in China refer to those court orders/decrees, which are not able to be enforced or
simply treated as 'settled' by the courts due to impossibility of enforcement, as legal "blank
notes". Meanwhile, based on the investigation report of the High People's Court of
Chongqing,509 45 civil cases510 filed for execution by court orders/decrees were selected to
show the average duration of enforcement and to illustrate that the level of economic
development has a great impact on court efficiency in respect to enforcement of law.
Furthermore, this chapter will make a critical evaluation of the current enforcement laws and
regulations.
It shall be mentioned that the study of enforcement of judgment is based on information
gained from different sources since the statistics about enforcement of judgments is
fragmentary and not systematically recorded by judicial statistics.511

II. The Organization of Enforcement and Procedure

Before addressing the problems existing in law enforcement and the difficulties encountered,
it is necessary to review the organization of law enforcement in China

L Enforcement Procedure

The procedure of enforcement of court orders/decrees is incorporated into the Civil Procedure
Code and forms an important part of the code. The current Chinese compulsory enforcement
mechanism is regulated in Section 3 of Civil Procedure Code and is divided into 4 chapters
with 30 articles, which includes General Rules, Application and Assignment, Measures,
Suspension & Expiration, etc. In 1998, the Supreme People's Court issued judicial

309
This is an unpublished internal report provided by the Supreme People's Court. See Investigation Report about the
implementation of the Regulation on Strict Implementation on Time Limit (2000), by the Research Team of Chongqing High
People's Court, 2001.
510
In the investigation, 73 cases filed for enforcement were selected by the Chongqing High People's Court to study the
duration of enforcement and for comparison. Among the 73 cases, 45 cases were civil cases.
511
Only since 1993, the official statistics in China Law Year Book revealed the number of settlement in law enforcement,
whereas no information was available in respect to filing and the settlement ratio.
198 Chapter 5 The Problem of Enforcement of Judgments by the Court

interpretation312 on enforcement based on summarized experiences.

According to the Civil Procedure Code (1991), the trial courts are responsible for the

enforcement of court orders with respect to civil cases;513 furthermore, the enforcement of

judgments should be undertaken by executors.514 In practice, the judges, who make the court

orders or decisions, normally undertake enforcement of court orders/decisions.515 'Executor'

is another name for the judge, who is also responsible for the enforcement, delivery of writ,

court records, etc. The problem of enforcement arises when the workload of the courts

increases, as was the case in the 1990's, due to the increased caseload, causing the filings for

enforcement to pile up in the courts.

Besides, if the respondent is outside of the limits of the territory of jurisdiction, the trial court

(principal court) can assign the court order/decision to be executed by the court where the

respondent is located (agent court) and the entrusted local court shall assist in the

enforcement of judgment within 15 days.516 The regulation is to save on travel costs and

reduce the burden of complainants when the execution of court orders concerns parties in

different territories of jurisdiction.317 Thereupon, the entrusted court (agent court) shall

enforce court orders/decrees from the principal court in the same manner as if it was a court

order/decree made by it's self.

By contrast, Germany operates a system within which specialized agents (Gerichtsvollzieher)

have a certain degree of independence, and have responsibility for certain aspects of

enforcement,318 while other aspects of enforcement are entrusted to a court officer

(Rechtpfleger).319 The courts with territorial competence are the Amtsgerichte320 for the place

312
The Supreme People's Court: Regulation on the Enforcement of Judgments, No. 15 (1998) Legal Interpretation.
313
Art. 207 of Civil Procedure Code.
314
Art. 208 of Civil Procedure Code.
313
According to the People's Court Organization Act 1954, the courts not only adjudicate the case, but also execute the
court orders/decisions by itself due to the few filings in the 1950s. Most of the civil cases were settled by mediation or
arbitration rather than by adjudication. The adjudication of cases and enforcement of court orders/decisions thus were under
the same tribunal. See He, Lan Jie / Lu, Min Jian (eds.), Judiciary in Contemporary China, Contemporary China Publication,
1993, p. 297.
316
Art. 209II, Civil Procedure Code (1991).
3,7
The Supreme People's Court: Some Opinions on the Application of Civil Procedure Code, 1992. Art 254 - 265
318
The Gerichtsvollzieher has primary responsibility for execution against movable property and negotiable instruments,
and for obtaining the delivery up of possession of movable and immovable property. See 808 flf ZPO, 57 GVGA and
883 ffZPO.
319
The Rechtpfleger has, inter alia, responsibility for the local and register, and for seizures of immovable property as well
as authorizing garnishment of debts. He also plays a role in guardianship and succession cases, and has recently taken on
extensive responsibilities in relation to insolvency proceedings. See German Rechtspflegergesetz (RPflG) 2 and 3.
320
Amtsgerichte are the district courts in Germany, which deal with small claims and family matters.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 199

where enforcement is to take place, i.e. the debtor has his domicile or where the assets are

situated. Whereas in the US, the law enforcement body is not subordinated to the courts,

instead, the State administration is responsible for the execution of judgments.

2 Enforcement Basis

The basis for enforcement is effective court decisions / orders, arbitration awards and

notarized claim rights.521

5. Measures of Enforcement

The main measures of enforcement include:

- inquiry, seizure, and freezing of the assets of the debtor;

- transfer deposit of the debtor, detaining and distilling the income of the debtor;

- sealing, seizure, freezing, auction, and sale of the property of the debtor;

- searching for the concealed property of the debtor in their living space or other

possible places;

- compulsory liquidation of real estate etc.

4. Major Enactments and Judicial Interpretation with regard to Law Enforcement

Since 1991 several regulations were promulgated by the Supreme People's Court to reinforce

the enforcement of law. The increase of enactments and regulations reveals the necessity of

enhancing law enforcement, but also reflects the difficulty behind legislation. Table 5.1

shows the relevant regulations related to law enforcement.

The interpretations in 1992 and 1998 from the Supreme People's Court have defined some

new measures to cope with the problems existing in enforcement, but these interpretations

have not had a positive effect and in some circumstances have even restricted the efficiency

321
By contrast, under the relevant Spanish law, the categories of enforceable title are comparatively wide. Any private
contractual documents can also be used as the basis for enforcement. In France, the French law recognizes a number of types
of instruments that allow a creditor to proceed to enforcement. These includes bills of exchange, unpaid checks and unpaid
rent arising out of a written contract for the lease of immovable property. See Kennett, Wendy A., Enforcement of Judgments
in Europe, Oxford University Press, 2000, p. 69.
200 Chapter 5 The Problem of Enforcement of Judgments by the Court

in enforcement, since current measures are too old and cannot adapt to social and economic
changes in China

Table 5.1 Main Regulations on Law Enforcement

1991 Civil Procedure Code, Section HI, Article. 207-236


1992 Some Opinions On the Application of Civil Procedure Code
1993 Regulation on Authorization of Enforcement between the Courts
1998 Regulation on the Enforcement of Judgments
2000 Regulation on Reinforcing and Improving Agent Enforcement

III. The Problems and Reasons for the 'Difficulty in Law Enforcement9

1. The Problems

Law enforcement has become a bottleneck for the judiciary in China. The situation in the past
few years in China can be identified as another form of judicial crisis322 when large amounts
of court orders are unable to be enforced. The public complains about the incompetence of
the courts in enforcing judgments and satirize the judgments made by the courts as legal
"blank notes".523 The difficulties in law enforcement have not only become a problem of
legal system, but also a problem to society.

According to the statistics of the High Court of Hainan Province, from January to October
1999, the total filings for enforcement in the province amounted to 11,170, with a value of
19.22 billion Yuan. Among the total filings, 3,311 cases were settled, with a value of 3.2
billion Yuan being fully or partly paid to the claimants.524 There were 7,859 cases still
pending. The settlement ratio was only 29.6%.525 In one of its cities, Haikou,526 the size of

322
As Buscaglia defined, "specifically, a judicial crisis begins at the point where backlogs, delays and payoffs increase the
cost (implicit and explicit) of accessing the system". Similar to the problem of court delay, piling of filings for enforcement
means that the law is unable to provide adequate remedies to the parties. To some extent, the failure of law enforcement is
more serious to the public, the public will lose their confidence in judiciary by reducing filing at the courts since the
probability of being redressed is low and the costs are high in the civil process.
323
Liu, Tong Hai and Zhu, Xiao Long, Is the Court Fee Reasonable? in: China Lawyer (12) 2002, p. 40.
324
Only 16.7% of the claim was compensated. Source: Tan, Shi Gui, Research on Judicial Reform in China, China Law
Press, 2000, p. 283.
323
Ditto.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 201

the backlog in the district courts and intermediate courts amounted to 4,579 cases, the total

value concerned amounted to 11.5 billion Yuan, which was around 8 times that of the total

fiscal income of the city.527 These statistics reveal that the law enforcement has become a

sharp point of social conflict. The failure of law enforcement led to severe grievances by the

creditors. Some of the creditors were not able to support their families or continued the

operation of their businesses, some factories even went bankrupt due to the failure of speedy

redressal. Parties had to appeal to local governments for help, some even used violent means.

The adverse effects are obvious, social stability is affected; the foundation of market

economy - trust and safety in trade - is endangered. Furthermore, such 'legal blank notes'

have also damaged the respect for the judicial system and the image of the courts.528

Similar to the target set for trial, most of the courts have a time bound program for the target

settlement ratio529 for law enforcement. However, achieving the target in law enforcement is

very difficult. In official statistics,530 an average of 23.8% of court decisions/orders cannot be

enforced each year,531 because cases are congested in the courts. For instance, more than

530,000 cases were filed for enforcement at the end of 1998 and the value of the disputes

exceeded more than 100 billion Yuan. But this empirical study and interviews show that the

situation is even worse in reality. One investigation indicated that at the end of 2000, a piling

up of 870,000 court orders/decisions relating to economic disputes were still yet not enforced;

the statistics show that around 50% of economic cases cannot be enforced.532 The situation is

much worse for lawsuits between banks and companies, one investigation indicates that the

banks won 95% of the lawsuits, but only 15% of them can be enforced.533 In several

interviews, lawyers even reported that only around 20% of the judgments can be successfully

526
The Intermediate Court of Haikou city, Hainan province.
527
Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 283. The fiscal income of the city
(Haikou) is around 1.4 billion Yuan in 1998.
Quoted from Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 283.
529
I was told by some courts that the normal targeted settlement ratio was around 65% to 78% of the filings for compulsory
execution. Furthermore see Luo, Shu Ping (Director of the Enforcement Bureau of the High People's Court of Si Chuan
Province), The Difficulties in Law Enforcement Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p. 44.
530
China Law Year Book, 1996 - 1998.
531
Calculation based on China Law Year Book, 1991-2000.
332
Zhang, Wei Ying / Ke, Rong Zhu, "The adverse selection in civil litigation and its interpretation - an empirical study", in
(2) 2002 China Social Science, p. 31.
533
Report from the 5* Bejing University New Year Forum on the topic of 'Economic Reform and Social Trust'. In:
www.sohu.com 07.01.2003.
202 Chapter 5 The Problem of Enforcement of Judgments by the Court

enforced and it is believed that the average rate of successful enforcement in all the courts

is supposed to be 25 - 30%.535

The understanding of successful enforcement may vary between the courts, the parties and

the lawyers, but nobody can deny the fact that law enforcement has become the most

troublesome task of the judiciary and a bottleneck for legal development. Enforcement of

judgments, especially relating to economic cases, has become a tough task for the judiciary.

As President of the Supreme People's Court. Xiao Yang, said in his address at the 9th People's

Congress on 10.03.1999:

"The cases filed at the courts in recent years for enforcement has risen sharply and there is an increasing

backlog in law enforcement. It has affected the functioning of the market economy and the realization of

justice... "S36

Due to difficulties in law enforcement, the year 1999 was defined as "Year of Enforcement",

and rules537 was promulgated by the Supreme People's Court to urge the courts nationwide to

treat law enforcement as a priority in judiciary work. In 1999, the courts were required to

concentrate their efforts to settle the pending cases for enforcement of judgments.

The consequence of failure to enforce the law has a negative effect. "A right without a

remedy is not a right". If judgment cannot be enforced, it may induce more breach of

contracts as one will conduct behavior opportunistically as not to abide by the contracts when

he/she can benefit from a breach of contract or when penalty and legal sanctions would be

small or the chances to be caught are weak. As already mentioned, the loss arising from the

disorder in the economy and the lack of trust in market transactions causes a reduction in the

quota of 10 - 20% of the GDP, with indirect and direct economic losses of 585.5 billion Yuan

each year, which is equal to 37% of the fiscal income of the state.538 On the other hand, the

rights of creditors are damaged. In some cases it causes loss of property or bankruptcy to the

creditors, when they cannot receive remedies for their grievances from the legal system. In

334
These interviews were conducted with several law firms in Xiamen, Beijing and Chongqing.
335
Liu, Tong Hai and Zhu, Xiao Long, Is the Court Fee Reasonable? in: China Lawyer (12) 2002, p. 40.
336
According to the Annual Report of the Supreme People's Court, 1999.
337
Regulation on Enforcement of Judgments, by the Supreme People's Court, 1998.
338
Supra note 86.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 203

some instances, it results in a loss of trust in the judicial system by the people causing
individuals to replace law enforcement with violent means. Furthermore, potential court-users
may reduce demand, as he knows that there is no remedy available even when the judgment
is in his favor. In this scenario, the rights of the parties cannot be protected. The social trust
system, which is the foundation of the market economy, is in danger since trade is not secure,
capital cannot be efficiently allocated, and the economic order is disturbed. It also impedes
the uniform rule of law and pride in the law when judgments are satirized as legal "blank
notes" of the law. Furthermore it violates the value of justice and equality and is contrary to
the principles of rule of law. Thus, the problem of law enforcement not only affects economic
development, but also affects social stability.

Z The Reasons behind the Difficulties in Law Enforcement

In practice, there are some obvious reasons behind the difficulties existing in law
enforcement:

a) Absence of the Debtors


The debtors disappear during the litigation, thus the writ cannot be delivered. Some
companies have no fixed offices and the authorities do not have effective administration in
respects to company registration, company profiles, and activities of the company. For
example, the debtors were not available in 30% of the cases filed for enforcement in a district
court in Kun Ming City of Yun Nan Province; in Quan Zhou city and Zhan Zhou city of
Fujian Province, judgments of 40% of the civil cases were made in the absence of debtors. It
is difficult for the courts and creditors to find out where the debtors are located.539

b) Difficulty in Tracing Property


The current economic system does not function well enough to tackle the problems arising
from law enforcement. For example, there are weak supervisory measures against the secret
transfer assets by the debtors. Some debtors have several bank accounts. They often use
private accounts to evade inquiry, or transfer cash. Some companies arrange artificial

Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 285.
204 Chapter 5 The Problem of Enforcement of Judgments by the Court

contracts of security or assignment agreements for their assets like vehicles or land to escape
legal liability. Due to the problems existing in commercial administration and lack of
cooperation from local banks, sometimes it is difficult for the courts to trace the property of
the debtors and the enforcement will take a longer time. However, this problem not only
exists in China, but also in Europe, obtaining the information about the debtor is very
essential in enforcement of judgments.540

c) Non-availability of Assets
In some cases which are related to administration, financial sectors, and enterprises owned by
the army,541 it is difficult for the court order to be respected since the debtor can resist
payment even when there are assets available. For example, a trust and investment company
belonging to the provincial government rejected payment of the debts it owed, as a result the
courts simply were not able to seize the assets and property of the company because of the
government's intervention.

d) Rough Legislation and Regulations


In general, the difficulties in law enforcement have their roots in legislature, the economic
system, the social environment and the political system.
The regulation on law enforcement is incorporated into the Civil Procedure Code and there is
no special legislature with regard to compulsory enforcement. The rough regulations on law
enforcement cannot meet the current situation. First, the regulation on law enforcement is not
detailed enough and too rough, thus it causes differences in understanding and interpretations
in practice; under a rough and ambiguous law, courts lack the necessary and tough measures
to cope with repudiation of debts, escape from liability in the form of transfer and
concealment property. Additionally, the law does not impose tough sanction on those debtors
who resist compliance with the law enforcement. The sanctions are weak and not effective
enough to deter unfaithful behavior of those debtors who reject declaration of their property

340
See Kennett, Wendy A., Enforcement of Judgments in Europe, Oxford University Press, 2000, p. 99 ff. It is
recommended that, for tracing the immovable property, technological innovation like computerization may be of great help.
Internet technology shall be introduced in future and registers shall be open to the general public so that they can get access
to the information related to enforcement.
541
In the 1990's, enterprises with military background entered the market and caused disorder to the market economy
because they abused their special power to escape taxes, smuggle goods and engage in illegal license trade etc.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 205

or declare it in a fraudulent way. The courts and creditors have to investigate by themselves,
sometimes even secretly, to find the property of the debtors. Secondly, there exist many
vacancies and gaps in the regulation and many new questions with regard to law enforcement,
it is difficult to find accurate answers in the current legislature and judicial interpretations and
there are no countermeasures defined by the law.542 Courts face many difficulties during the
investigation of company registrations, business activities of the companies and compulsory
seizure, and freezing of assets of the debtors. Also, there are no regulations on coordination
among the courts, the administration, the banks and the taxation offices. This results in low
efficiency and many restrictions in law enforcement. Moreover, the law contradicts itself in
many circumstances, some public sectors reject complying with the law by the application of
its' own regulation as an excuse; for instance, a state-owned textile factory may reject the
following of the liquidation or reorganization procedure since all measures must be approved
by the local governmental industrial bureau. 543 In some cases the governmental
administrations will not allow the registration office to suspend or declare bankruptcy of its
subsidiaries so as to avoid legal liabilities.544 The courts simply cannot force them to comply
with the law since these public sectors have much more influence in the local government,
which often instructs the courts to behave in a certain manner.

e) Corporate System and Bankruptcy


Under a transition economy, the difficulty in law enforcement reflects conflicts of interest in
the economy. Most of state-owned corporations experienced a low efficiency under a
backward corporate system, which has resulted in large amount of debts. It is beyond the
capability of state-owned corporations to liquidate their debts when they are faced with
continuous loss. In some cases there are more than ten creditors against one debtor, the
creditors would have little hope of being compensated if the debtor is bankrupt. In some cases
the firms already had difficulties paying the salaries to its workers. The compulsory measures
in these state-owned firms would trigger more unemployment for which the local government
542
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 257.
543
Law enforcement is extremely difficult with respect to bankruptcy proceedings, as the local governments very often use
their administrative discretion to influence the courts not to enforce the court orders or delay the enforcement in fear of
unemployment, or simply because of selfish departmentalism.
544
In China many firms were set up by the local industrial bureaus. Some years ago many firms were even set up by the
local customs and the local army for economic purpose. This phenomenon is diminishing after the strong regulations by the
government in the recent years.
206 Chapter 5 The Problem of Enforcement of Judgments by the Court

would not like to see happen. In some cases the state-owned firms have received special
funds from the state to resolve financial difficulties within a certain number of years. Capital
is frozen under special management and the courts are not able to enforce orders against these
firms.
The problems of enforcement also have to do with state policy in recent years, especially in
real estate and land development. Thousands of building projects closed down during the
crisis, which happened in 1999 as a result of excessive lending in the real estate market. It is
much more difficult to enforce the judgments related to real estate due to its complexity and
the ambiguity of property right.

f) Debtors' Resistance
Many debtors have a dim view of law and do not honor the court orders/decisions. Legal
sanctions are not effective in forcing the debtors to obey the law. Repudiation of debt or
denying payment is very common. Some debtors conceal or transfer property secretly, or
even save the cash of the firm under private accounts to avoid detection by the courts.545 As
* piercing the corporate veil' is not a rule in Chinese corporate law, it is difficult for the courts
to secure assets which are transferred by the mother company to its subsidiaries strategically
before the judgment is made. Some firms even arrange artificial contracts, security and
bestowal to escape debts.
Under the current reform scheme of the modem corporate system,546 many big state-owned
firms take advantage of the reform and get rid of the burden of debts by separating the old
firm from the new one. Many firms make use of defects in the accounting and auditing
systems and leave debts to its old firm, which are valueless, whereas the valuable assets are
incorporated into the newly formed entity. Some firms hang their debts on government
administrations, which have no assets and will never pay the debts. In some cases, some
private enterprises establish subsidiaries to play games with the courts and even escape the
debts by means of bankruptcy.547 In case of bankruptcy, other problems exist, for instance,
under reorganization, special arrangement with regard to aftercare of the workers and debts
545
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, p. 250.
546
The reform began in the early 1990's to restructure the corporate system of state-owned firms, mainly to build up an
efficient modern corporate system. Under the reform scheme, many big state-owned firms were reorganized as stock
companies, which were listed in the stock market in Shanghai and Shen Zheng.
547
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, p. 251.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 207

will be made under the assistance of local governments. Debts are normally offset by paying
a sum of compensation to the dismissed workers; whereas the creditors, like banks or other
state-owned firms, have to follow the instructions of the local governments under special
arrangements.

g) Localism
Localism is a problem not only in trial, but also in law enforcement. The enforcement of
court order requires assistance and the coordination of land registration authorities, banks,
taxation offices, and vehicle administrations. In practice, the local authorities like banks,
taxation offices, vehicle administration and the local courts of the respondent are normally
not active in providing assistance and cooperation if the creditors are from other territories.
They typically have a strong bias to protect local economic interest and it is very difficult to
enforce court orders.
Furthermore, interference of local governments increases the difficulties in enforcement of
law. Some local governments press the courts not to take action against particular firms which
are under special protection, especially for big state-owned firms, any liquidation and
reorganization would be extremely difficult if there were no consent from the local
governments.

h) Weak Sanction and Deterrence


The law is not effective enough to impose sanctions on those debtors who attempt to escape
their liabilities by transferring assets before enforcement procedures; meanwhile, there are no
effective measures to deter the behavior of the debtors.548 Due to skepticism about the
competence of the courts and the dim view of law, some creditors even use violent means for
private enforcement.549

i) Organizational Problem and Qualification of the Executor


The courts do not treat the enforcement as a priority and focus much more on trial activities.

548
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 257.
349
Violent means against enforcement is also frequent. According to the report from the National Meeting of the Courts in
1999, there were 330 cases of violent resistance against enforcement and more than 400 executors injured from January until
Sept. 1999. This is attributed to the dim view of law of the debtors, possible miscarriage of justice, or improper behavior and
attitude of the executors in the course of enforcement.
208 Chapter 5 The Problem of Enforcement of Judgments by the Court

First, most of the courts haven't set up a separate tribunal for law enforcement until only

recent years. The Civil Procedure Law only stipulates that 'the District Courts/County Courts

and the Intermediate Courts can establish enforcement bodies according to its 'necessity'.550

Under such regulation, an enforcement tribunal within the court is seen as an option; besides,

the law does not even regulate that the Supreme People's Court and the High Courts shall

establish such professional institute. The organization of law enforcement differs from court

to court, some have a special tribunal to deal with enforcement of court orders/decisions, but

in many other courts, judges who adjudicate cases have to enforce the court
551
orders/decisions. Secondly, the position of executor is ambiguous. The management of

personnel is according to the relevant regulations in the Judge Act. The executors are only

seen as annexed personnel to the courts. Low quality personnel are not competent enough in

law enforcement and are one of the main reasons for delay.552 Some ignore the rights of the

creditors and do not perform their duties, some are corrupted and even collude with the

respondent. By contrast, in Germany, the qualification of Gerichtsvollzieher is based on a

variety of laws; the Gerichtsvollzieher shall work within the court service for at least two

years.553 In Sweden, where the enforcement agency is a part of the State administration, the

senior officers shall be qualified lawyers. In Sweden, the enforcement agency appears to

operate very efficiently due to high qualification of the personnel and easy access to wide

range of public records concerning debtors, although it has some of the problems inherent in

bureaucracy. In France, a huissier de justice (the executor) must have a law degree, and in

addition must undergo a training period of two years.554

Furthermore, organizational limitations with regard to administration and coordination of the

courts affect the functioning of law enforcement in China The courts lack good coordination

due to their loose ties with each other and sometimes are even in conflict with each other

330
Art. 209II, Civil Procedure Code (1991).
551
Compare Wu, Dong Yu and Hua, Shi, An Investigation and Comment on the Internal Setup and Categorized Personnel
Management of the People's Courts, in: Zhang, Wei Ping, Review on Judicial Reform, \fol. 4, 2002, p. 463, under Footnote
532
According to Mr. Luo, Shu Ping, director of the Execution Bureau of the High Court of Si Chuan province, due to the
law quality of the personnel, cases are often delayed by the executors by excuses.
333
The relevant laws include the law on civil servants (Beamtengesetze) and the federal Gerichtsvollziehersordnung (GVO),
as well as various state laws on qualifications, training, office management, and aspects of enforcement process.
Organizationally, the Gerichtsvollzieher is attached to the Amtgericht, and subject to the direction and control of the
President of that court He is subject to the supervision, but not a direct management, of the court. Whereas the Rechtpfleger
is a court administrator who has taken specialized legal training, but need not to have a legal training, as per
Rechtspflegergesetz (RPflG) 2.
334
Kennett, Wendy A., Enforcement of Judgments in Europe, Oxford University Press, 2000, p. 77 flf.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 209

because of localism in the course of enforcement. At the same time, higher courts do not have
effective supervision measures to enhance enforcement work in the lower courts, which is
strongly influenced by the local administration.

IV. A Survey of Duration of the Enforcement of Judgment

1. Sample Study

In order to find out the average duration of enforcement of court orders/decisions, 45 civil
case filings555 for enforcement were sleeved to reveal the duration of the enforcement.
Furthermore, comparison of enforcement among different regions and different hierarchies
was made to see the impact of economic development on the success of law enforcement.

2. Average Duration of the Enforcement of Judgment

Table 5.2 reveals the average duration in each phase and the total duration in law enforcement
based on random sample of 45 civil case filings. The average duration for enforcement of
court order after filing is 105.9 days, 14 cases exceeded the time limit as regulated in Civil
Procedure Code,556 which accounts for 31.1% of the total sample.
Average time consumed for filing (from date of filing for execution till the date when
notification was delivered) was 19.5 days; in the phase of preparation for execution (from the
date of notification till the date of the first compulsory measure was taken), the average time
was 47.1 days; in the phase of compulsory enforcement (from the first compulsory measure
taken till the date of compulsory enforcement was completed), the average time was 17.5
days; in the phase of dispute resolution (from the date of dispute was submitted till the date of
decision by the collegial panel), it took 0.98 days on average; in the phase of final
settlement (from the date of decision made by the collegial panel till the date when the
decision was delivered), the average time was 11.9 days.

355
Supra note 509, 510.
356
Art. 219 of Civil Procedure Code: 12 months if one of the parties or both are natural persons; 6 months when both parties
are firms or organizations.
210 Chapter 5 The Problem of Enforcement of Judgments by the Court

Table 5. 2 Average Time Consumption in each Phase and Average Duration of Cases.
Sample: 45 Civil Case Filings for Enforcement of Judgments
Phase of Filing Preparation Execution Meeting Settlement Average No. of Percentage

Civil Cases for of the / Court Duration Cases Of Cases

Enforcement Collegial Orders exceeding exceeding Time

of Court Panel Enforced Time Limit

Orders Limit

Duration in 19.5 47.1 17.5 0.98 11.9 105.9 14 31.1%


Each Phase
Source: compiled from unpublished internal report provided by the Supreme People's Court, Investigation Report about the
implementation of 'Regulation on Strict Implementation on TimeLimif, by the Research Team of Chongqing High People's
Court, 2001.

Graph 5.1 shows the average time consumed in each phase during enforcement of court
orders/decrees

Graph 5.1 Average Time Consumption in each Phase of Execution

Source: compiled from unpublished internal report provided by the Supreme People's Court, Investigation Report about the
implementation of 'Regulation on Strict Implementation on Time Limit1, by the Research Team of Chongqing High People's
Court, 2001.

The empirical study shows that delays in the enforcement of court orders/decrees in civil
cases were serious. Among 45 civil cases, 14 cases were delayed, some cases were 'settled'
Chapter 5 The Problem of Enforcement of Judgments by the Courts 211

by the courts simply because the probability of enforcement was seen as being 'small ' or
because the time limit was running out. Under the time bound program, judges or executors
settle the cases according to the target of settlement ratio instructed by the higher courts.557
Many lawyers say that only around 20% of their cases can be successfully enforced, whereas
most of the cases are delayed or treated as 'settled' when the judges think that the probability
of successful enforcement is low or the time limit is running out.558 In most of the interviews,
judges, court police, parties, and lawyers admitted that besides the problem of court delay,
enforcement of judgments has become the toughest problem currently facing the judiciary in
China

3. Comparison: Economic Development and Duration

a) Comparison between Different Regions


Economic development in China differs from region to region. In the east region, economy
performs better than that of the western part and the courts in the east region were
functioning better due to a better capacity of the local budget supply, human capital, and
people's attitudes towards the rule of law.559
Table 5.3 presents the average duration of enforcement of Court Orders in Chongqing
Region (West) and Jiang Su Province (East).

Table 5.3 Comparison of Enforcement of Court Orders in Different Regions


Average Duration of Law Percentage of Exceeding Time Limit
Enforcement (days)
Chongqing (City) 126 27.3%
Jiang Su Province 76 14.3%
Source: compiled from unpublished internal report provided by the Supreme People's Court, Investigation Report about the
implementation of "Regulation on Strict Implementation on T\meLimit\ by the Research Team of Chongqing High People's
Court, 2001.

Table 5.3 reveals that in the east province of Jiang Su, the duration of enforcement of court

337
The court can stop enforcing the court orders/decisions when the possibility for enforcement is very little and thus the
case is regarded as settled in statistics.
338
The interviews were made with judges and lawyers in Xiamen City.
339
Due to the legal education, social and economic environment, people in different regions have different attitudes towards
the enforcement of law. In China, the law enforcement further has to do with the effort of the local government. See Xiamen
Daily (07.02.2003).
212 Chapter 5 The Problem of Enforcement of Judgments by the Court

orders was far less than that of western region like Chongqing where economic performance
was not as promising compared with the eastern provinces. This indicates that economic
development has a strong impact on the duration of enforcement of court orders.

b) Comparison of Courts within the Same Jurisdictional Territory


Even in the same region, the duration of law enforcement differs from court to court under
the same territory of jurisdiction. Take 2 regional district courts which are under the
jurisdiction Chongqing High Court as an example. Table 5.4 reveals that in the Districts
Courts of Bei Pei and Sa Ping Bei, where the economy has a higher development level than
the districts of Peng Shui and Wu Long, the duration of enforcement of court orders was
much less.

Table 5. 4 Comparison of Law Enforcement in Different District Courts under


Jurisdiction of Chong Qing City
Average Duration of Law Percentage of Exceeding Time Limit
Enforcement (days)
Peng Shui and Wu Long 74 1.2%
(districts with better
economic performance)
Peng Shui and Wu Long 186 33.3%
(districts with bad economic
performance))
Source: compiled from unpublished internal report provided by the Supreme People's Court, Investigation Report about the
implementation of 'Regulation on Strict Implementation on Time Limit', by the Research Team of Chongqing High People's
Court, 2001.

In Peng Shui and Wu Long (districts with better economic performance) it took 74 days on
average for law enforcement; whereas in Peng Shui and Wu Long (districts with bad
economic performance), it took 186 days on average for law enforcement and the percentage
of violation of the time limit was higher (33.3%).
The comparison revealed that in a more developed economy, law enforcement will have a
higher probability of success because people may have better financial status and are more
trustworthy.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 213
V. Critical Evaluation of Current Law Enforcement Mechanism

The difficulty in law enforcement has become a bottleneck for the judiciary in China and
there are plenty of reasons for it, as already illustrated previously in this chapter. The
following makes a critical evaluation of law enforcement and it also attempts to find a better
solution for a sound enforcement mechanism

1. The Effectiveness of Enforcement Law

The enactment of the Civil Procedure Code in 1991560 has increased some specific measures
of enforcement, especially in tackling the transfer of assets, repudiation of debts, despising
court orders, awards of arbitration, etc. The main legal consequences resulting from these
unfaithful behaviors are primarily defined in Art. 227, 102 of the Civil Procedure Code and
Art. 283, 285 of the 'Opinions'561 issued by the Supreme People's Court;562 however, in
practice, these regulations contain some shortcomings: i) the clauses are not detailed enough
and mainly consist of abstract and general principles, therefore the courts have different
understandings and interpretations of these clauses during the course of enforcement.
Furthermore, the lower courts have to ask the higher courts to coordinate and instruct them on
how to do apply the regulation when they have doubts about these clauses. Consequently, the
efficiency of enforcement is affected; ii) some measures for enforcement have little impact on
the parties and lack feasibility; iii) the measures are not effective enough to tackle
considering the newly emerging social and economic changes and judicial interpretations are
not effective enough to fill in the gap. For instance, the courts normally put the properties of
the debtors up for public sale so as to provide remedies to the creditors. In practice, the
properties of the debtors cannot be auctioned or sold because of the absence of a market563
and/or buyers. Furthermore, liquidation requires a strict legal procedure for the auction or sale
of the assets. According to the judicial interpretation of the Supreme People's Court, the
properties of the debtors can only be used to offset their debts directly, when both the

560
The draft promulgated in 1982 only contained some very simple measures.
561
The Supreme People's Court: Some Opinions on the Application of CMl Procedure Cock, 1992.
562
These clauses and regulations mainly define the right of the courts and the legal consequences if the parties impede the
judgment and enforcement, as well as the consequences of violation of the law by violent means.
In many cities, there is no auction market or publicly recognized asset-assessment organization.
214 Chapter 5 The Problem of Enforcement of Judgments by the Court

creditors and debtors agree not to undertake auction or sale of the property. Those unsellable
assets of the debtors can only be transferred at a specific discounted value to the creditors
with consent. Thus, enforcement becomes difficult under these conditions in which offset of
debts by sale or transfer of assets is restricted. Enforcement law and judicial interpretations
are not effective in providing applicable measures.
It is necessary for the courts to adapt to the emerging social and economic changes, by
summarizing the problems existing in the enforcement of law, so as to find effective measures
to tackle the problems. Meanwhile, it is considerable to enact a separate compulsory
enforcement law to enhance the efficiency of the enforcement.564

2 The Social and Economic Environmentfor Enforcement

Difficulties in law enforcement are rooted in the social and economic environment of law
enforcement. They can be summarized as follows:

a) Lack of Financial Ability of the Debtors


According to an investigation by the Execution Bureau of the High People's Court of Fujian
province, the failure of enforcement contributes largely to the financial ability of the
debtors.563 In a survey of 3146 civil/economic cases filed in one district court, it was found
that 2057 judgments could not be enforced simply because the debtors were not available.
The remaining cases could not be enforced because the debtors did not have enough financial
capability or the creditors agreed to postpone the payment.566

b) Local Protectionism
A strong local protection exists within local governments and administrations in the course of
transit from a planned economy to a market economy. Localism exists not only in the local
administrations, but also in the courts. Due to the dependence upon the budget in local
governments and the social ties within local firms, the local courts sometimes lack the

564
The Supreme People's Court has put forward "enactment of compulsory enforcement law" as a research subject in 2000.
565
The Execution Bureau of the High People's Court of Fujian province, Impossible enforcement and the risk of the private
and commercial exchange, in: People' Judiciary, (10) 2002, pp. 26,27.
366
Ditto.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 215

goodwill to cooperate and assist in law enforcement when the court orders/decrees are made
by other courts which are outside of its territorial limit of jurisdiction.567

c) Intervention from Local Administrations


The intervention of the local administrations has been an obstacle for law enforcement. The
parties use their ties and "relationships" in the administrations to influence judges and
executors, especially when the cases are related to local state-owned companies. The
executors are strongly affected by the explicit or implicit instruction of the officers in the
administrations. As a result, enforcement is often interrupted or delayed.568

d) Dim View of Law


Many people or firms are still not well adapted to the rule of law. Moreover, an unsound and
infant legal system gives the parties the opportunity to escape liabilities. A lot of businesses
still rely on soft constraints like morality, reputation and goodwill.569 This leads to the
difficulty of legal intervention and protection when the civil and economic rights of the
parties are infringed upon.

e) Ad Libitum
Ad Libitum exists in economic activities and mismanagement in the Industry & Commerce
Administration.
In the course of establishing and developing a market economy, law is still not effective
enough because social norms and ethics are deeply rooted in the culture as a soft norm still
plays a very important role in economic activities.570 Law enforcement faces more
difficulties when economic activities are not undertaken within the framework of law,
because the judgment made in such a situation will not be effective. In many cases, litigants
are not able to get compensation for litigation cost from the respondents, much less the
remedies.

557
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, p. 250
5(58
Ditto.
569
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 2S0. Compare: Schaefer,
H.-B., Die Bedeutung des Zivilrechts fuer den Entwicklungsprozess, Braunschweigische Wisscnschaftlichc Gesellschaft, J.
Cramer Verlag, 2001, p. 135.
570
Ditto.
216 Chapter 5 The Problem of Enforcement of Judgments by the Court

Furthermore, mismanagement in the Industrial and Commercial Administration is also a


cause leading to difficulties in enforcement. For example, some firms were in heavy debt but
no bankruptcy orders were given; some firms did not meet the registration standard with
respect to capital and personnel; some were leased out by the state firms to private firms and
it has led to ambiguity of the legal entities; consequently, law enforcement against these firms
or individuals is very difficult and the process becomes very complicated.

3. Short-term Deterring Effect ofthe Measures by the Central Government

The severity of law enforcement hinders, not only economic development, but also leads to
stress and pressure on the courts. This problem was especially severe from 1995 to 1999. On
one hand, the courts were unable to deal with the increasing workload from filings and piling
up of civil cases, as well as the increase in filings for enforcement;571 whereas on the other
hand, the public lost confidence in the courts' competence in enforcement and sometimes the
legal means were replaced by private settlements or even violent means.572
This serious problem in law enforcement affects the reform and development of economy of
the country. In October 1999, the Central Government Discipline Committee and Ministry of
Supervision jointly issued a notification requiring all its administrative branches to supervise
and scrutinize any violation in law enforcement.573 The importance of supervision and
scrutiny are mainly an effort to deter and avoid the following problems, which are most
troublesome and frequent in law enforcement.
- intervention by local government into the courts,
- unlawful regulations or instructions by local governments for the protection of local
economic interest,
- transfer of assets by firms,
- lack of cooperation and assistance by local courts574 when the enforcement of

971
Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, pp. 284,285, 287.
572
Ditto.
373
Ditto.
374
According to the regulation of the Supreme people's Court, all cases involved with debtors outside of territorial limit of
the trial courts shall be assigned to the local courts for enforcement. The local courts (the agent courts) shall cooperate with
the original courts, but the regulation does not define the responsibility and obligation of the local courts, as well as how to
proceed and coordinate between the courts, it is very often mat the local courts delay the enforcement or do not cooperate
with the original courts when they are influenced by the respondents or the local governments.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 217

assigned court orders/decrees (against the local debtors) are made by the trial courts

outside of their territory limit,

- making use of current reform of state corporation asset reorganization to escape legal

obligation and transfer corporate assets, or avoid paying debts and loans through fake

bankruptcy and fake security of titles. (The reform of state corporations in recent

years has allowed state-owned firms, which are de facto bankrupt, to undertake

reorganization procedures with creditors. The reorganization normally separates the

assets and debts of a firm. Debts will be converted into shares, and the creditors

(mainly the banks) have to accept the reorganization scheme since they haven't got a

strong influence on the reform of state firms.575 The reorganization even allows a

newly established firm to take over the assets and leave the debts to the old firm; in

many cases, firms transfer assets to subsidiaries or branches so as to delay and escape

debts. The old firm may go bankrupt quickly, in such a situation the creditors find it

difficult to trace the assets of the new firm due to the complexity of the reform In fact,

the reform of state corporations is very tough and troublesome in China, the creditors

find it difficult to have redressal by legal means since the law is weak in this field).

These emphases have touched on the central problems in law enforcement. Political

intervention from the central government indicates that difficulties in law enforcement have

endangered the social and economic order. A further deterioration would cause the loss of

public trust in the legal system; meanwhile, it may also reveal that due to the current

complexity of legal and economic reform, as well as the strong influence of local

administrations, the problems of law enforcement cannot be solved simply by legal means,

special means, namely political supervision and scrutiny is also necessary to deter the abuse

of power under the current political system Thus, the notification issued by the two central

state departments can help to deter the abuse of power and intervention by local governments

in the judiciary. Nevertheless, it must be addressed that in the long run the difficulties should

be dealt with by legal means rather than by supervision from the standpoint of the rule of law.

373
Local banks normally have to follow the orders of the local governments. The reform is controlled and dominated by the
central government and the local administrations.
218 Chapter 5 The Problem of Enforcement of Judgments by the Court
4. Assessment of 5 Year Reform Outline of the People's Court (Reform Outline)

While China is facing many obstacles in law enforcement, reform of enforcement law is
considered to be the most necessary and acute. On 22.10.1999, the Supreme People's Court
issued the Reform Outline aimed at establishing a sound legal system576
The proposed organizational reform and the goal of reform with respect to law enforcement
are put forward in Section 2 of the Reform Outline. The main contents are:
i) Before the end of 1999, judicial work with regard to law enforcement in each
province or each autonomous region shall be under the administration and
supervision of the High People's Court; the Supreme People's Court and the High
People's Courts shall coordinate with each other to deal with problems arising
from law enforcement;
ii) Reinforcing the personnel for enforcement, that is, unqualified personnel will be
assigned to other work. Hie personnel for enforcement shall not be less than 15%
of the total personnel in the each court and they shall be professionals and
specialized in enforcement;
iii) After experimentation, a nationwide enforcement mechanism shall be established
to supervise and coordinate enforcement work for all of the courts in China
Furthermore, the Supreme People's Court requires that all of the High Courts should establish
an Execution Bureau within the courts to coordinate and supervise enforcement work
within its' territorial jurisdiction. Almost half of the High Courts in China have established
Execution Bureaus within the courts.577

It is a good reform suggestion to conduct institutional and organizational reform within the
court system. However, it has been criticized that the Reform Outline with respect to law
enforcement is still too abstract and broad; there are no specific measures or enforcement law
to follow and the courts still execute the court orders/decisions based on its' own

376
Luo, Shu Ping, The Difficulties in Law Enforcement Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p.
47. Compare:Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 288.
377
Luo, Shu Ping (Director of the Execution Bureau of the High People's Court of Si Chuan ProvinceX The Difficulties in
Law Enforcement: Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, pp. 43,46.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 219
understanding. The reform shall focus on the improvement of personnel for execution and
promulgation of Civil Compulsory Enforcement Law and relevant regulations, moreover, in
all lower courts, execution tribunals shall be established within the courts so that the
Execution Bureaus and the tribunals will have both the function of solving disputes arising
from enforcement and the function of judicial administration.579 Besides these internal
reforms, it must be mentioned that reform shall also touch on external factors like the
deterrence of intervention, localism, and corruption, since law enforcement is closely related
to the political, administrative and economic environment.

5. The Coordination between Judgment and Enforcement

In some countries like Germany and Japan, the organization of law enforcement is
established within the court. The executor is appointed by the court, and judges have a close
coordination with the executors.580 The enforcement of law will be assigned by the tribunals
to different executors according to the nature of the civil cases. Each executor shall specialize
in certain cases and thus enforcement will be easier. While in the US, UK and France, law
enforcement bodies are established outside of the court, the judicial executor or judicial
officer does not belong to the court but instead belongs to judicial administration; courts are
only responsible for judgment, but not responsible for enforcement.
In China, the enforcement body is established within the court. According to Civil Procedure
Code, the court of first instance is responsible for enforcement, and executors are assigned for
law enforcement. The district courts/county courts and the intermediate courts may establish
Execution Tribunals within the courts.581 The Execution Tribunal shall be separated from the
Trial Tribunal and is responsible for law enforcement in the civil cases.
Although the enforcement mechanism within the courts is not a critical reason for
difficulties in law enforcement, the separation of trial and enforcement results in some
difficulties in the law enforcement mechanism
First, within the courts, the coordination between the executors and judges is very weak since
378
Ditto.
579
Ditto, p 47.
380
In Taiwan, law enforcement body is established within the court, but it is separated from the tribunal and is an
independent department of the court.
381
Art. 208,209 of Civil Procedure Code
220 Chapter 5 The Problem of Enforcement of Judgments by the Court

they are under different departments of the courts and there is no hierarchical links; they care
only about their own work and therefore it makes coordination difficult. Judges concentrate
much more on adjudication but ignore the importance of enforcement, and judges seldom
assist in law enforcement after the court orders/decisions are assigned to the executors
(judges sometimes have to execute the court orders/decisions in case no executor is available
in the courts). Meanwhile, it is regarded that the difficulty of law enforcement has also much
to do with the low quality of personnel for execution, as the executors are not professional
and competent enough for the task.582
Secondly, coordination and assistance among the courts is weak. According to a regulation583
issued by the Supreme People's Court in 2000, most of the court orders with the debtors
outside of the territorial limit of the original court (trial court) shall be entrusted to the courts
where the debtors are located. Chart 5.1 shows the relationship between the courts under the
current regulation when the debtors are out of the territorial limit of the principal court.

Chart 5.1 The Pattern of Law Enforcement when the Parties are in different Territory
of Jurisdiction

Creditor + -Debtor

Principal Court - Agent Court

Remarks:
1. The Creditor in City A applies for compulsory measures against the debtor in City B based on the court
judgment or other legal documents.
2. The Principal Court must assign the court order to the Agent Court in City B where the debtor is
located and asks for enforcement
3. The Agent Court shall enforce the court order made by Principal Court against the Debtor.
4. The Creditor will have its remedies in case of successful enforcement.

582
There is no specific qualification requirement for executors. Some of the executors do not have systematic legal
education and training before taking the work. They are assigned to the job after the calling for reinforcement of enforcement
in recent years. See Luo, Shu Ping (Director of the Enforcement Bureau of the High People's Court of Si Chuan Province),
The Difficulties in Law Enforcement: Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p. 47.
583
The Trial Committee of the Supreme People's Court: Regulation on Reinforcing and Improving Agent Enforcement,
passed on 24.02.2000.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 221

The "Regulation on Enforcement of Law" 1998 further regulates that the courts entrusted

"have the right to take compulsory measures for enforcement and compulsory measures

against any conduct which violates enforcement".584 In practice, the efficiency of entrusted

execution as shown in Chart 5.1 is very low due to the problems of localism, corruption and

self-interest of the local courts. The entrusted courts have no incentive to enforce court orders

since the judgments were made by others and the execution will take extra time and increase

the workload of the courts. Meanwhile, there is no time pressure on the entrusted courts since

there is no sanction against them if the court orders from other courts are not enforced. The

regulation of the Supreme People's Court does not specify any responsibility and

obligation585 by the entrusted courts if they fail to perform their duty. Furthermore, the

entrusted courts have a bias to protect local debtors and local interests, especially if there is a

strong government intervention when the debtors are state-owned firms. The problem of

localism is currently regarded as one of the most serious problems in execution in law

enforcement.586

The efficiency of the enforcement is affected to a large extent by coordination between the

courts and the organization within the same court. It is necessary for the reform to enhance

cooperation between the courts and other departments under the same court.

6. Enforcement of Arbitration Awards

The law enforcement mechanism does not function well in respect to arbitration awards.

According to Art. 207 of Civil Procedure Code, besides court orders/decrees, the courts are

responsible for execution of other legal rulings like arbitration awards and notarized payment

obligation. In practice, very few of such legal rights can be enforced in time or even

successfully because the courts are unwilling to undertake responsibility when the workload

for the enforcement of court orders/decisions is already very heavy; enforcement in case of

arbitration awards is therefore put aside. Furthermore, the Civil Procedure Code allows the

courts and the executors to undertake substantive and procedural review of the arbitration
584
The Supreme People's Court, Regulation on Enforcement of Judgments, 1998, Art 113,118.
585
In Civil Procedure Code and relevant regulations it only regulates that the entrusted courts "shall not reject" any
assignment by the trial courts (the principal courts), Art. 209II, Civil Procedure Code (1991).
586
Tan, Shi Gui, Research on Judicial Reform in China, China Law Press, 2000, p. 288; Qi, Shu Jie, Research on Reform of
Civil Procedure Law, Xiamen University Press, 2000, p. 270.
222 Chapter 5 The Problem of Enforcement of Judgments by the Court

awards and the notarized documents.587 The executors very often reject enforcement of the
awards made by arbitration committees and ask the parties to take court proceedings.
Although the "Regulation on Enforcement of Judgments" 1998 have reaffirmed the legal
effectiveness of arbitration rulings and notarized documents for compulsory enforcement,588
there are no signs of any improvement in enforcing the arbitration awards and notarized
documents.

VI. Findings and Suggestions

1. Findings

Enforcement of court orders / decrees has been an obstacle of the judiciary in China.
According to interviews and literature, the ratio of successful enforcement is very low. 25% ~
30% of the court decisions/orders cannot be enforce.589 According to the statistics of Hainan
province, the settlement ratio was only 29.6% for cases filed for enforcement from January to
October 1999.590 The conclusion based on the statistics in the China Law Year Book also
reveals severe problems in law enforcement in China,591 and indicates that the judiciary in
China is heavily affected by the failure of law enforcement.
The reasons behind the difficulties in law enforcement in China are complicated: first, the
enforcement law and relevant regulations are too rough and lack practical measures. The
regulations on law enforcement is written in the current Civil Procedure Code and only has
30 articles, which are mainly principles and lack workable measures, this leads to different
understandings, and arbitrariness, in law enforcement. In the meantime, such rough
regulations cannot solve the difficult and complicated problems arising from the reality of
enforcement.592 Secondly, the average quality of executors is low. They are not professional
and not competent enough to deal with execution when disputes arise, to some extent, it
increases the difficulty of law enforcement. Thirdly, these difficulties have also a lot to do

587
Art. 216-217 of the Civil Procedure Code.
588
The Supreme People's Court, Regulation on Enforcement of Judgments, 1998, Art. 2.
589
Supra note 535.
590
Supra note 525.
591
Supra note 531
592
See report from the National People's Congress Assembly, in www.sina.com.cn 10.03.2003.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 223

with the current reform of the corporate system in China and debtors often make use of the
reform to escape liability. Fourth, the coordination between judgment and execution within
the court is weak; judges and executors do not communicate with each other closely;
concerning enforcement outside of the courts of the territorial limit of jurisdiction. The local
courts entrusted to enforce the law lack the incentive to cooperate and assist when their own
caseload is already heavy or when they have a bias to protect local debtors or local interests.
Fifth, the problem has much to do with the current social and economic environment in which
localism has become a serious issue in jurisdiction, but also in law enforcement.
The sample study based on 45 cases reveals the serious problem facing the judiciary. The
duration of law enforcement for these 45 case filings for compulsory execution was 105.9
days. The study also indicates that the level of economic development has had a great impact
on the efficiency of law enforcement. In most of the interviews, judges, parties and lawyers
admitted that the enforcement of court orders/decrees is the toughest and most troublesome
problem in the judiciary.

2. Suggestions

a) Reinforcing and Improving the Enforcement Law


Currently there is no separate enforcement law in China. Section 3 of Civil Procedure Code
defines compulsory enforcement procedures and specific measures to tackle transfer of
assets, repudiation of debts, and consequences of despising the court orders of arbitration
awards etc. Table 5.1 (see II. 5. in this chapter) illustrates enforcement law and relevant
regulations. Since execution is different from judgment and has its own characteristics and
tasks, it is necessary to promulgate a separate law for enforcement rather than incorporating it
into the Civil Procedure Code. The enforcement law should be made to apply more effective
practical measures for execution. A separate law593 for compulsory enforcement can avoid a
weak link between the civil process and the enforcement procedure;594 furthermore, it will
593
Compulsory enforcement mechanism is an important part of the judiciary. There are mainly 3 types of legislature in
respect of enforcement law: the first is to incorporate the compulsory enforcement mechanism into the Civil Procedure Code,
like Germany; the second is to promulgate a separate enforcement law, like Austria, Japan, Belgium and Taiwan; the third is
to incorporate the enforcement mechanism into bankruptcy law and mix it with the bankruptcy legislature, like Swiss land
and Turkey. See Liang, Shu Wen, Theory of enforcement and practicing, People's Court Publication, 1993, pp. 183, 184,
185.
594
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 253.
224 Chapter 5 The Problem of Enforcement of Judgments by the Court

help avoid the frequent application of the principles of civil procedure law in law
enforcement due to the absence of practical regulations and specific enforcement laws.595 A
separate law will enrich workable measures compared to the abstract principles and simple
measures of enforcement law, which are incorporated into the Civil Procedure Code.
Besides a detailed and workable law, there should be strict regulations on asset assessment,
auction, sale, suspension and expiration of execution, enforcement procedures and
supervision procedures in the short term

b) Elimination of Localism and Local Intervention


Interference by the administration is a big obstacle in law enforcement, especially in case of
disputes between parties in different regions. Localism focuses only on the local interest and
damages the national interest in the long run. The enforcement of law therefore shall find
ways to tackle this serious problem in the judiciary within the current framework of
administration and partisan influence. Under the current political framework, it is important
for the local governments to reinforce supervision and scrutiny for any violation of the
principle of the rule of law.

c) Professionization of the Executors


Considering the low quality of human capital for law enforcement in the courts, the reform
shall stress the importance of improving the quality of executors. Meanwhile, the executors
shall be more professional in dealing with complicated cases. In some countries like Germany,
the executors are more professional and specialize in specific cases. This will help to resolve
the problems arising from execution more efficiently and effectively. Professional and
qualified personnel are essential to enhance the efficiency in law enforcement.
As more than half of the High Courts in China have set up Execution Bureaus within the
courts, execution tribunals are recommended for establishment in the lower courts and these
execution tribunals shall be under the administration of the High Courts. The High Court in
each province shall be responsible for administration and supervision, while the lower courts

595
Ditto.
Chapter 5 The Problem of Enforcement of Judgments by the Courts 225

shall be responsible for execution. Some have also suggested to the establishment of a
collegial panel in the courts for law enforcement,597 under which the presiding executor is
responsible for enforcement of court orders, the assistant executors are responsible for
assisting in the work, but enjoy the right to express his/her opinion in case of disputes during
the enforcement, such an organization would be more democratic and efficient.
Furthermore, the courts shall also reinforce enforcement by increasing the number of
personnel for law enforcement according to the nature of the cases. In the 5 year Reform
Outline of the Supreme People's Court, it is aimed to have more than 15% of the personnel in
the courts to be responsible for law enforcement. In short, both the quantity and quality of
personnel shall be enhanced to reinforce law enforcement. Moreover, an incentive scheme
shall also be considered to promote work efficiency of the executors.

d) Application of Flexible Measures


Due to the change of circumstances, part of the enforcement law cannot adapt to current
market economy.598 In the short run the legislature is not able to fill the gaps of the
enforcement law, therefore, before the new law and new measures are promulgated, it is also
necessary to reform the inadaptable measures under the current legal framework. For example,
many state-owned firms with heavy debt are striving to survive under the current corporate
reform, and the enforcement may cause more difficulties to these firms, thus, flexible
measures like reorganization instead of liquidation might be more efficient in some cases
from an economic point of view, but to those firms which are de facto bankrupt and have no
value in an economic sense, liquidation is necessary to provide due remedy to the creditors.
Additionally, other measures shall be also considered to supervise the parties and the
execution procedure. For instance, media plays a very important role in supervision. Debtors
are more disciplined under the supervision of media. Some cities use media like TV and
newspaper to disclose the names of debtors, who have escaped from liability, and it has
resulted in a good effect Furthermore, a mechanism of declaration of property should be set
up to trace the property of the debtors. And it is practical for the courts to arrange

596
Luo, Shu Ping (Director of the Enforcement Bureau of the High People's Court of Si Chuan Province), The Difficulties
in Law Enforcement: Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p. 47.
597
Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 275..
598
Many measures regulated in the Civil Procedure Code were based on the plan economy.
226 Chapter 5 The Problem of Enforcement of Judgments by the Court

coordination meetings or discussions to find effective procedures. In general, it is important

to build up a sound social environment with respect to media supervision, coordination

among the courts, banks, taxation offices, administrations, etc., as well as an effective legal

mechanism for law enforcement.599

Enforcement is complicated work; it not only needs improvement in the legislature and the

coordination within the courts, but also improvement of the social and economic environment.

The compulsory enforcement law and legal reform should be aimed at protecting the rights of

creditors and providing speedy redressal to them, and further guaranteeing the safety of

economic transactions.

Qi, Shu Jie, Research on Reform of Civil Procedure Law, Xiamen University Press, 2000, p. 286.
Chapter 6 Summary and Policy Recommendation 227

Chapter 6

Summary and Policy Recommendations

If the judiciary is to provide the impartiality and efficiency necessary for public trust, a well defined

program for judicial reform needs to address the major causes of deterioration in the quality of court

services. This reform effort must address the root political, economic and legal causes of an inefficient and

inequitable judiciary and not simply deal with its symptoms. Basic elements of judicial reform must include

improvements in the administration of the courts and case management practices; the redefinition and/or

expansion of legal education programs and training for students, lawyers and judges; the enhancement of

public access to justice through legal aid programs and legal education aimed at fomenting public

awareness of its rights and obligations in the courts; the availability of ADR mechanisms, such as

arbitration, mediation and conciliation; the existence of judicial independence (that is, budget autonomy,

transparency of the appointment process and job security) coupled with a transparent disciplinary system
60
for court officers; and the adoption of procedural reform where necessary. - Edgardo Buscaglia

Legal System and Civil Process in Developing Countries

A well functioning legal system shall provide speedy redressal to the parties and easy
accessibility of justice to the general public. However, court delay has been an obstacle of the
judiciary in developing countries. Legislatures and judicial systems in developing countries
still lack the autonomy, stature, resources and competence needed to carry out all of their
constitutional functions fully. Courts are overburdened and their proceedings, both criminal
and civil, are routinely delayed for years. Judges are, for the most part, poorly trained and low
paid, and the courts lack the funding to conduct investigations and administer justice
effectively Furthermore, judicial decisions are heavily influenced by political considerations,
intimidation, or outright corruption. Therefore, if the judiciary is to provide the impartiality
and efficiency necessary for public trust, a well-defined reform program needs to address the

600
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. II, de Geest and B.
Boukkaert (eds.X 1999, pp. 585-586; Also see homepage (http://encyclo.findlaw.com/).
228 Chapter 6 Summary and Policy Recommendations

main problems affecting the current quality of and causing constant deterioration to court
services. The reform should be a permanent commitment to implement a program to change
the inefficient system Moreover, the reform shall not only deal with the symptoms of an
inefficient judicial system but also to address the political, economic, and legal roots of an
inefficient and inequitable judiciary.
Civil process in China has more or less the same problems as other developing countries. The
courts lack budget autonomy and rely heavily on local governments; in the meantime, strong
intervention exists from local administrations and partisan influences within the courts.
Internally, judges have to report cases to higher-ranking positions for instruction. Corruption
and miscarriage of justice are still common in the courts. Furthermore, the legal system does
not function well in respect to quality of judgment. Despite the high settlement ratio and the
relative moderate duration of trial cases, the ratio for appeal and retrial is comparatively high
in China and the increase of such instances leads to a lengthy and costly process.

Summary of the Empirical Work

- Research Design
The functioning of the court system in China with respect to court delay and its costs have
been analyzed based on primary as well as secondary data. The primary data were collected
randomly from the district court of Huli, Xiamen City and the Intermediate Court of Xiamen
City, with a sample size of 287 and 213 filed civil cases, respectively. Among 287 trial cases
filed in the district court of Huli, Xiamen, 63 cases were brought for appeal in the
Intermediate Court of Xiamen. The Secondary data (107 cases) is mainly collected from
relevant publications edited by the Supreme People's Court.
The overview of filing and disposition in all the courts in China is based on the secondary
data collected from China Law Year Books; the analysis of duration of the courts in the High
Courts and the Supreme People's Court is based on 107 trial cases filed in the High Courts.
These cases are also appeal cases filed at the Supreme People's Court and are collected
randomly from the case books edited by the Supreme People's Court.
The opinions of the parties, judges and lawyers were collected through the use of a designed
questionnaire; a separate questionnaire was designed to collect opinions from court personnel
Chapter 6 Summary and Policy Recommendation 229

in respect to court delay and the factors affecting duration. Meanwhile, oral interviews and
personal observations were conducted to analyze the functioning of the courts.
The study of current litigation cost and its effect on the judiciary was based on current laws
and cases; specific investigation of the budget in all of the courts of Jiangxi province was
done to illustrate the importance of financial support from the state in enhancing the
accessibility ofjustice.
The study of enforcement of judgments was based on statistics and secondary data.
Furthermore, 45 civil cases filed for compulsory enforcement were collected to illicit the
duration of execution and the impact of economic development on the efficiency of law
enforcement. Specifically, the investigation of difficulties in law enforcement was based on
oral interviews with lawyers, the parties and judges.
This empirical study is an effort to investigate the average duration of the courts and to find
the reasons causing court delay. What are the problems existing in procedural law? What kind
of reform measures are needed to improve accessibility of the courts and to provide speedy
and inexpensive remedy to the parties involved?

- Findings based on the Empirical Work


In general, according to the empirical study, so far court delay has not been a big problem in
the lower courts (district courts/county courts and the intermediate courts) in respect of trial
cases. The problem of delay exists in appeal cases and retrial cases, which consume larger
amounts of time, especially for retrial cases, it normally takes around 10 months on average
for disposition in retrial court and 2 or 3 years to complete the whole process.
First, the empirical study based on the secondary data shows that the settlement ratio is high
in China. The settlement ratio is more than 90% each year. This high settlement ratio has to
do with the time bound program used in the Chinese courts. Under the time bound program,
the courts are expected to realize the target established in the time bound program The time
bound program increases pressure on the judges to settle the cases within a certain time limit
and to avoid delay in the courts. However, the justification of efficiency cannot simply be
based on the settlement ratio. The average disposition of judges is still very low compared to
230 Chapter 6 Summary and Policy Recommendations

judges in other countries, for instance, one judge only disposes 34.5 cases per year on

average, this indicates that in general the efficiency of the courts is still very low.

Furthermore, the time bound program has had some adverse effects: due to the imbalance of

disposition, caseloads become heavy at the end of the year, and judges have to make a speedy

trial so as to reach the targets established in the time bound program602 Mediation is

frequently arranged by the courts to speed up settlement. The procedural and substantive

rights of the parties may even be violated.603 Another side effect is the low quality of

judgment arising from speedy and rough judgment: around 40% of the judgments made by

the trial courts are changed in the appellate courts,604 and around 20 - 25% of the appeal

cases are further under retrial.605 Under appeal and retrial procedure, lawsuits will be lengthy

in the whole procedure and costly to the parties involved, as well as the state.

Secondly, the empirical study based on random cases collected from the district court and

intermediate court in Xiamen City indicates that court delay in the lower courts, namely the

district court and the Intermediate Court, is not a big problem. The average duration of 287

civil cases filed at the district court of Huli was 56.5 days for cases disposed under simple

procedure and 155 days for cases in regular order. The short duration is due to the fact that

many cases filed at the district courts are cases with small dispute values and are simple cases

in respect to fact-finding and application of law. The average duration of 213 trial cases filed

at the Intermediate Court of Xiamen was 261 days. The average duration of disposition in the

High Courts and the Supreme People's Court based on 107 cases was 10.63 months and 9.51

months respectively. Due to the complexity of cases, the higher the judicial hierarchy the

longer the disposition will be.

Interviews with involved parties, judges and lawyers shows that the statistics submitted to the

Supreme People's Court do not reveal reality since many lower courts establish a target

settlement ratio for the year and dispose the cases according to the time bound program. This

leads to manipulation of figures and fraudulent reporting of disposition in the statistics when

601
See Table 3.4 in Chapter 3.
602
The promotion as well as the remuneration of the judges are based on the fulfillment of the target established in the time
bound program.
6(0
See Chapter 3, Part II, VIII b).
604
See Chapter 3, Table 3.16 and Table 3.17.
605
Supra note 392.
Chapter 6 Summary and Policy Recommendation 231

judges face piling up of cases at the end of the year. As a result, a high settlement ratio cannot

explain the social sentiment towards the efficiency of the courts. On the contrary, the time

bound program for high settlement ratios and speedy settlements may lead to more

miscarriage of justice. The empirical study based on secondary data reveals that judges tend

to settle their entire caseload at the end of the year, either by asking for withdrawal first and

for re-filing again in the coming year, or by speedy settlements such as simple trial and

mediation. Furthermore, there are some links between the high settlement ratio and the

miscarriage of justice, that is, the high ratio of judgment made by the trial courts were

changed in the appeal stage and many cases were further filed for retrial after appeal.

Thirdly, as to the duration of appeal and retrial cases, the duration of these cases are is

comparatively long, besides the complexity of the cases, the longer duration of these cases

has much to do with the length of time taken for delivery of filing documents from the trial

court to appeal court. The time consumed in delivery of filing documents is a 'blind' in

calculation and judges may intentionally delay the delivery of documents; the time is not

calculated in the duration of the case and is regarded as one of the major reasons for delay.606

Retrial cases take a much longer time compared with trial and appeal cases. In this empirical

work, it was found that retrial cases normally take 2 or 3 years on average from filing until

settlement. The long duration is a result of defects in procedure law in which there is no

restriction on length of disposition and time limit for retrial cases. Although the amount of

retrial cases is not big compared with the total caseload filed in the courts, the proportion is

large based on the caseload of appeal cases. Around 20 - 25% of appeal cases are brought for

retrial under the procedure of judicial supervision.607 It is these cases that frustrate the parties

and the long duration of these cases has been one of the main reasons which have caused

public sentiment and mistrust in the judiciary.

Fourth, the investigation of litigation costs indicates that the burden of these costs and the

lack of budget for the courts has hindered the accessibility of the courts and impeded the

606
In an interview with judge Wang, Yan Bin of the Supreme People's Court. Also see Wang, Li Wen and Wang, Yan Bin,
Understanding and Application of Regulation on Strict Implementation of Time Limit, People's Judiciary, (1) 2000, p. 11 ff.
607
China Law Year Book, 1991-2000. Supra note 287.
232 Chapter 6 Summary and Policy Recommendations

functions of judiciary. The study of the cases reveals that the litigants were burdened by

various fees in litigation and in some cases the additional cost for bribery. In a lawsuit, the

litigation cost is about 25% - 30% of the claim 608 Due to insufficient local budgets and state

subsidy, the courts in China rely heavily on the income of litigation cost for its' daily

operations. More than 60% of the total budget comes from the income related to litigation

fees, as shown in the study based on the statistics in the courts of Jiangxi province. The

participation of lawyers in the civil process is still not promising, since lawyers charge too

high fees and sometimes are considered as middlemen for bribery. In 1996, 84% of civil cases

did not have the engagement of lawyers.609 In recent years there has been a tendency for

more lawyer engagement in the civil process. In another investigation by the High Court of

Chongqing City, based on 445 civil cases in 2001, it was found that 45.2% of the cases

involved a lawyers' engagement610

Fifth, the central problem lies in law enforcement. It has been admittedly obvious that law

enforcement has been an obstacle for the development of a market economy and a bottleneck

for the judiciary. The study of enforcement of judgment is based on fragmentary information

from different sources due to the lack of systematic records injudicial statistics. According to

statistics issued by the Supreme People's Court, the settlement ratio for enforcement of

judgment ranged from 60% - 80%611 and the courts normally establish a target settlement

ratio of 60% - 70% or even higher.612 However, according to the statistics of the High

People's Court in Hainan province, from January to October 1999, only 29.6% of 3,311 case

filings for enforcement were fully or partly settled;613 according to interviews with individual

lawyers and literature, many lawyers believe that only 20 - 30% of judgments can be

enforced. Furthermore, the study based on 45 samples reveals that the duration of law

enforcement for these cases filed for compulsory execution is 105.9 days. The study also

608
See Chapter 4, II, 2 and Table 4.1.
609
Supra note 484.
610
Source: from unpublished internal report of the High Court of Chongqing City 2002, provided by the Supreme People's
Court.
6,1
China Law Year Book, 1996-1998.
612
Luo, Shu Ping (Director of the Enforcement Bureau of the High People's Court of Si Chuan Province), The Difficulties
in Law Enforcement Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p. 44. This is also confirmed by
interviewed judges who told that the normal targeted settlement ratio established was around 65% to 78%
613
Supra note 525.
Chapter 6 Summary and Policy Recommendation 233

indicates that the level of economic development has a great impact on the efficiency of law
enforcement. In most of the interviews, judges, involved parties and lawyers admitted that
enforcement of judgments is the toughest and most troublesome problem in the judiciary.

Finally, the empirical work justifies the theory that rules are better than standards. For
instance, the problem of court delay was regarded as serious before the Regulation on Strict
Implementation of Time Limit (2000), which was promulgated by the Supreme People's
Court to enhance the efficiency of the courts and reduce court delay. The regulation defines in
details how to calculate the time for filing, disposition, prolongation of the judgment, time
limit for collecting evidence, adjournments allowed in the process and the time for assigning
the cases, as well as the time limit for law enforcement, etc. According to investigations made
by the Supreme People's Court,614 the detailed regulation has restricted the arbitrariness of
the judges in calculating the time and has established a more workable program for trial.

Policy Recommendations

- Independence of Jurisdiction within the Courts


The interference of the court administration and the Trial Committee in consideration of
quality control, is not persuasive. Only with the independence of judges in jurisdiction within
the court, will the quality and efficiency of the judgment be finally improved. Interference
from the Trial Committee and the higher courts not only causes delay, but also leads to
reliance of judges on the decisions made by the court rather than by judges themselves. The
quality of trial will be affected since the judges cannot make their own judgment, while those
know little about the case make the judgment. Moreover, from an efficiency point of view,
the decision process would be much longer if higher ranking officials or the Trial Committee
interfere into cases. As experience shows, this is one of the reasons that many cases take a
long time for discussion by the Trial Committee and result in delay.
Another problem with respect to independence of jurisdiction in China is interference from

614
See the report made by the Supreme People's Court, by Wang Li Wen, and Wang, Yan Bin, Understanding and
Application of Regulation on Strict Implementation of Time Limit, People's Judiciary, (1) 2000, p. 11 ff.
234 Chapter 6 Summary and Policy Recommendations

higher courts. According to the law, the higher courts can only supervise the lower courts
according to legal procedure, for example, appeal and retrial procedures, higher courts are not
allowed to interfere into the judgment of cases in the lower courts. In practice, it is very
common for lower courts to ask for instruction from higher courts on how to make case
decisions. In fact, it has changed the 2-tier jurisdiction into one trial. The procedural right for
appeal and retrial is deprived by such practices, as the parties will obtain the same court
decision when the case is appealed.
Thus, judicial independence in China not only means independence from external
interference, but also independence from internal interference. According to the Constitution
and the Civil Procedure Code, the courts shall undertake jurisdiction independently and shall
not be interfered with by the administration. This principle should be further interpreted
into practice within the courts: the judge and the collegial panel should be free from the
interference of the presiding judge, president, Trial Committee of the court and all other
departments or individuals within the court;615 moreover, judicial independence shall also
keep the courts free from any interference by higher courts.

- The Need to redesign the 2-tier Jurisdiction


Due to the differences in situation and background of legislature, the establishment of a
jurisdiction system must take litigation efficiency and cost into consideration. A 2-tier
jurisdiction is considered to be more efficient in China in consideration of its vast land and
density of population. However, the 2-tier jurisdiction reveals some problems in practice: first,
the 2-tier jurisdiction cannot guarantee the quality of some complicated cases since most of
the cases are filed in the local courts for appellate jurisdiction which is final and binding on
the parties. In practice the local courts very often ask for opinions from higher courts on how
to apply the law to complicated cases and such practice violates the principle of independence
of jurisdiction and the spirit of procedure law. Secondly, the parties often apply for retrial
even after final jurisdiction is made by the appellate court. As there is no time limit on

613
Such independence in jurisdiction can be referred as 'internal independence' within the courts/ External independence'
refers to independence of jurisdiction which is free from the interference by any parties outside of the courts.
It is viewed that independence of jurisdiction in China refers to the independence of the courts rather than judges. According
to the law, each Trial Committee can review the cases and make decision on the cases; in practice, judges have to report
cases to higher official in the courts for opinions. See, Yang, Li Xin, Civil and Administrative Litigation, Supervision and
Justice, in Law Research, (4) 2000, p. 16.
Chapter 6 Summary and Policy Recommendation 235

settlement and times of disposition, the parties can try again and again to gain from the
generosity of the procedure. This results in a '3-tier' or '4-tier' jurisdiction de facto or even
indefinite trials and lead to a vulnerable finality of law.616 On the other hand, a 2-tier
jurisdiction is a waste of judicial cost and resources to easy and simple cases. In practice,
many cases with respect to small claims and family matters are frequenty brought for appeal.
In China, a country with vast land, is it necessary to apply a 2-tier jurisdiction for large
numbers of simple and easy cases, or cases with small dispute values, especially in the
countryside? Experiences in Western countries may be useful in the design of a new Civil
Procedure Code in respect of a summary court, in which one judge is selected for judgment of
simple and easy cases. Appeal is only allowed when the parties make the statement of their
intention to do so during filing.
In this context, the 2-tier jurisdiction may be revised as follows: for simple and easy cases, or
cases with small dispute values, normally one trial of jurisdiction shall be final and binding
on parties so as to speed up the process and reduce caseloads in the lower courts and reduce
litigation cost, as well as judicial costs and resources. For complicated cases, cases with big
dispute value or high level of difficulty in application of law, a 3-tier jurisdiction may be
allowed. In order to save litigation cost and avoid court delay, the Civil Procedure Code shall
allow a leap-frogging procedure617 in case the parties who filed in the District Court or
County Court are keen to resolve their dispute in an early manner and they agree on the facts
of the case but only disagree on the law. Furthermore, to relieve the burden of cases in the
High People's Courts and the Supreme People's Court, original cases shall not be filed in
these courts. These courts shall only be responsible for appellate cases and supervision of the
lower courts, and keeping the uniform rule of law of the county.

- Time Limit for Evidence Collection


The Civil Procedure Code has only some rough regulations on how to collect and provide
evidence to the court during litigation. In practice some problems arise from this "roughness",

616
Liu, Nanping, A Vulnerable Justice: Finality of Civil Judgments in China, Columbia Journal of Asian Law, Vol. 13,
Spring 1999. Compare Sheng, De Yong, Some Problems in the Reform of Judicial Supervision, in: People's Judiciary (8)
2001, p. 16.
617
In German Civil Procedure Law (ZPO), Art 556 a allows the parties who file in the County Court or District Court to
appeal directly in the Federal Supreme Court and bypass the Court of Appeal if the parties only disagree on the law.
236 Chapter 6 Summary and Policy Recommendations

which affects the efficiency of the courts.


With respect to burden of proof, the Civil Procedure Code does not exactly state the issue of
burden of proof, and to what extent it must be proven. It does not regulate when the reversal
of the burden of proof shall apply and when the burden of proof can be exempted, etc.618 The
law also does not have any regulations and rules for consequences to the parties in case of
non-performance of the duty of providing evidence.
The regulation on time limit of evidence in Civil Procedure Code is not detailed and is not
exact enough, causing frequent delay in the court, especially in the pretrial phase.619 The
parties may make use of this procedural defect to delay the hearing and the trial. Thus, very
often it causes delay in the courts and incurs high litigation costs and judicial costs.
In some cases, the parties hide particular evidence from the court of the first instance but
present it later in the appellate court deliberately as new evidences so as to win the case, or
they simply apply for appeal or retrial when there is new evidence available. The
consequence is that the parties are able to apply for retrial again and again whenever new
evidence is available. It is inevitable that the duration of cases will be long and costs for all
parties involved will be high. Therefore, the law should regulate that the appellate court can
reject the evidence in case of intentional hiding of and the party who provides new evidence
during appeal shall compensate the other party for their economic loss. Such regulation will
guarantee the implementation of burden of proof and protect the interest of the innocent party.
Since the current regulation on burden of proof is too rough, has a heavy impact on duration
of court proceedings and incurs a high process cost to the parties, it is necessary for
legislature to enact new regulation on evidence.620

- Restructuring Mediation Mechanism


Mediation has a long tradition in China and has played a very important role in civil dispute
resolution. In practice, the courts overstress the role of mediation and ignore the procedural
and substantive rights of the litigants (creditors) whom are forced to accept mediation
arranged by the courts since judges have bias in using meditation to solve cases. The

6,8
Art. 64 (1) of Civil Procedure Code: "The Parties have the responsibility to provide evidence for his claim".
619
As revealed in the investigation of court duration, the pretrial preparation is too long compared with other phases of trial.
620
Evidence Act is under draft to solve some problems in legal practice.
Chapter 6 Summary and Policy Recommendation 237

acceptance of mediation because of pressure from the judges sacrifices the legal rights of the

creditors. Many cases are settled in this way as it is quicker and more economic to solve the

cases and avoid the application of law in complicated cases; moreover, mediation is used as a

means to conduct a speedy trial to realize the target settlement ratio of the year.621 In such

situations, procedural and substantive rights are more likely to be violated.622 Therefore, law

should restrict the discretion of judges to mediate the cases and respect the private autonomy

of the parties; meanwhile, lawyers should play an active role in reconciliation for the parties.

In such circumstances, the settlement ratio by mediation may be lower, but the rate of

settlement by reconciliation will rise.

Besides, according to Civil Procedure Code,623 the parties are not bound to the consent made

through mediation before receipt of the written form made out by the court and are allowed to

ask the court to undertake proceedings. Such regulations seem to extend more substantive

rights to the parties, but it is against the principle of efficiency and leads to an increase in

litigation costs simply because the legal relationship is unstable when the parties still have the

right to overturn the agreement already reached with mutual consent in mediation. On the

other hand, court delay may occur when the parties are able to apply for retrial if new

evidence proves that the mediation was made against the will of the parties or the mediation

agreement violates the law 6 2 4 The retrial procedure, after mediation, creates additional

proceedings in the court and will increase the caseload. It contradicts the principle of free will

in mediation and the basic purpose of mediation itself. Consequently, such retrial increases

litigation costs and leads to lengthy process. In this context, the courts should not overuse

mediation to settle the case, just for the purpose of speedy disposition and avoiding

application of law.

621
Compared with trial, mediation has some benefits: first, there is low risk to the judges if the cases are settled by
mediation since mediation avoids the possible mistake in the application of law if the cases are settled by court hearings and
trials; furthermore, cases settled by mediation normally will not involve further proceedings of appeal and retrial; secondly,
settlement by mediation will facilitate the enforcement, third, settlement by mediation save time and cost judges do not have
to spend time and energy to study how to apply the law if the case is complicated (mediation is preferred by judges
especially under the current situation in which the quality of judges in China is low).
Jing, Han Chao and Lu, Zi Juan. Some Basic Problems in the Revision of Civil Procedure Code, in: Zhang, Wei Ping
fed.X Review on Judicial Reform, 7T ed., 2002, pp. 18-21.
Art. 91 of Civil Procedure Code: "If agreement is not made after mediation, or one party pulls back from the agreement
before receipt of written documents, the court shall make judgment in time".
624
Art. 180 of Civil Procedure Code.
238 Chapter 6 Summary and Policy Recommendations

- The Need to Restructure Retrial Procedure


Retrial Procedure plays a very important role in the Civil Procedure Code and in legal
practice. However, this empirical study indicates that retrial procedure is the main cause for
long delay in the courts since there are no restrictions on time limits and times of dispositions
in retrial procedure.
Since retrial procedure is stipulated in Supervision Procedure - Chapter 16 of the Civil
Procedure Code and most of the cases filed for judicial supervision are retrial cases, it would
be better to revise the Supervision Procedure as Retrial Procedure so as to be aligned with
reality625 and general practice in civil law countries.
Law should be relatively predictable and stable. However, under the current design of retrial
procedure, the finality of law is challenged. The original purpose of the legislature for retrial
procedure is to correct any mistakes based on facts and to protect the substantive rights of the
parties. But, law is being used as a means to adjust social relationships and to seek balance in
social order. Legal procedure is regarded as the last available remedy for the parties and
therefore the court orders/decisions shall be final and binding on the parties in litigation.
Stability and safety will be diminished if the court orders/decisions are frequently changed
through retrial procedure. Further, from an efficiency point of view, law should find a balance
between correcting mistakes, cost savings, and reducing court delay.
As already discussed in detailed previously, the scope of the retrial procedure is too broad and
excessive. The parties, the courts, and the procuratorates can start the procedure if 'they think
there are mistakes contained in the court orders (which are already effective)'; besides, the
losers have a strong incentive to misuse the procedure since no fees are required for retrial.
Consequently, the number of retrial cases will be great and the workload of the courts will
increase. The long process of retrial will lead to an increase in litigation costs and the waste
of judicial resources, diminishing the confidence of the public in the judiciary.
Compared with retrial procedures in other countries, the definition of retrial procedure in
Chinese Civil Procedure Code is too rough and broad, even cases settled by mediation can be
filed again under retrial procedure. The broad definition in conditions for retrial and the
elastic stipulations of the articles has damaged the seriousness, stability and finality of law.

Cases under judicial supervision are called retrial cases in China.


Chapter 6 Summary and Policy Recommendation 239

In this context, the Civil Procedure Code should redefine the conditions for application for
retrial and narrow the scope for retrial. The law shall also stipulate time limit and times of
disposition for retrial procedure so as to avoid delay and endless trials. It might be practical to
undergo only one disposition for retrial case, and only a higher court can have jurisdiction of
retrial cases. Moreover, as private law, private autonomy shall be respected; in principle,
retrial procedure shall only be initiated by the parties involved whereas a third party, like the
court, should not be allowed to intervene and initiate the retrial procedure only when it is
related to public interest.

- Human Capital and Quality of Judgment


As the District Courts and Intermediate Courts settle more than 80% of the cases in China,
the quality of judges in these courts are very important to justice. The training of judges in
lower courts has affected the quality of judgments and leads to a high rate of appeal and
retrial in the higher courts. Therefore the reform shall address the importance of human
capital. If the lower courts are equipped with judges who lack proper training, the courts will
not be competent to provide speedy redressal to the parties since low quality of judgment will
cause an increase in appeal and retrial cases and result in long duration of process as well as
an increase in litigation costs and judicial costs. Obviously, the functioning of the legal
system and the quality of judgments will be affected when the courts lack human capital.
Furthermore, despite the large number of judges in China, many of them lack legal education
and legal training, as well as practical experiences. Many judges came to the courts as retired
officers from the army and their understanding of law is insufficient in the modern market
economy. Some judges are admitted after only a short training period. Besides, many judges'
time is occupied by administrative matters and the time available for trial is not sufficient for
a heavy caseload. Therefore, reform should remove those unqualified judges from their
positions and reallocate them to other supplementary positions in the courts. All judges must
have legal education and pass the National Judicial Exam as already experimented with in
2002. An incentive scheme including a high salary should be provided to qualified judges to
guarantee justice, as well as to deter corruption. In short, the quality of judges is decisive for
the success of judicial reform since the quality of judgment cannot be guaranteed and the law
240 Chapter 6 Summary and Policy Recommendations

cannot be properly enforced without qualified judges.

- Budget Autonomy and State Subsidy


Low budgets and state subsidies lead to high litigation costs and impede accessibility to
justice. Many local administrations cannot provide enough financial support to the local
courts due to financial stress. The budget shortages are one of the reasons that courts always
charge additional costs to the parties and create opportunities for more rent-seeking and
corruptive activities. Moreover, the lower courts cannot undertake reform measures in
administration, case flow management and establishment of computer system, as well as
personnel management due to the shortage of budget. Furthermore, the reliance upon the
budget in local courts creates another problem: intervention of the local administration into
judiciary.
Under the current situation in China, the reform may be more realistic if the budget of the
courts is based on a 2-tier supply system, namely, the state shall provide sufficient budgets to
the courts, especially those in poor provinces and regions to guarantee a certain level of
budget autonomy. This part of budget will ensure the daily operation of the courts in respect
of remuneration and operational costs of the courts. On the other hand, the local governments
shall be responsible for the budget of court buildings and facilities. Meanwhile, the
unqualified personnel shall be removed from the courts so as to relieve the financial burden
of the courts and guarantee the salary of judges especially in the County and District Courts.

- Enforcement of Law
Law enforcement has been an obstacle of the judiciary in China As the previous study
indicated the main reasons behind the difficulties in law enforcement are: First, compared
with law enforcement, courts put much more emphasis on the jurisdiction of cases and ignore
the importance of enforcement of judgment. The quality of executors is not high and the
facility for enforcement like vehicles and communication system is not well equipped in the
courts. Secondly, the lack of coordination within the courts and the lack of coordination and
assistance from other courts make it more difficult to enforce court orders/decrees in time,
especially in case of existence of rent-seeking, corruption, interference and local protection.
Chapter 6 Summaiy and Policy Recommendation 241

Thirdly, due to backward administration in case flow, the speed of execution is strongly
affected. Fourth, as a result of rough legislature of enforcement law, the general principles
and abstract regulations lead to disputes and different understandings in the course of
enforcement. Furthermore, the difficulties in law enforcement are strongly affected by the
current difficulties in big state-owned firms in respect to liquidation and reorganization, as
well as the social and economic environment.
It is necessary for the courts to enact reform measures to solve the problems existing in law
enforcement. First, it is necessary to promulgate a separate enforcement law to summarize the
experiences gathered from the past and tackle current problems in law enforcement.
Workable and practical measures shall be introduced to replace abstract principles since the
difficulties of law enforcement have much to do with the rough legislature of enforcement
law. Second, it is recommendable to establish an Execution Tribunal in each court. The
Execution Tribunal shall be equipped with professional executors and deal with all the
enforcement of judgments; the coordination between the judgments and law enforcement
shall be improved within the court. Additionally, these Execution Tribunals will be under the
administration of the Execution Bureau established in each High Court in the provinces so as
to improve coordination and quick dispute resolution in the course of enforcement.626
Furthermore, case flow management shall be applied in enforcement of court orders in each
court, which should also be under the administration of the High Court in each province. In
case of enforcement of court orders in other places that are out of the territorial limit of
jurisdiction, the entrusted courts shall do their utmost to assist in the execution and avoid
local protection. Finally, the executor shall be given more training in enforcement. They
should be professionals and specialize in this specific field of work.

Conclusion
In a transition economy, the legal system, especially civil law, plays a very important role in
the market economy. Countries around the world, east and west, are undertaking profound
judicial reform in order to reduce court delay and improve litigation efficiency. A judicial

626
Compare Luo, Shu Ping (Director of the Enforcement Bureau of the High People's Court of Si Chuan ProvinceX The
Difficulties in Law Enforcement: Difficulties and Chaotic Situation, in China Lawyer, (12) 2002, p. 47.
242 Chapter 6 Summary and Policy Recommendations

system with 'Chinese characteristics' faces a grim challenge in respect to inequality, court

delay, high litigation costs and difficulties in law enforcement. From the end of 1980's,

judicial reform and justice itself have caught the attention of the general public. In the past

years, it seems that the reform has made no big progress. There are various obstacles and

impediments in the way of the realization of justice and accessibility to justice. Courts are

often interfered with and cannot be independent from the local administration; judges cannot

make their own decisions, as they have to report cases to higher rank officials; corruption in

the judiciary is serious and leads to distrust by the public; the quality of judges in general is

still very low and the pattern of trial is backward; case flow management and the supervision

mechanism should be improved to adapt to the increase of burden of cases; difficulties in law

enforcement impede the sound development of a market economy and the judiciary. All these

problems behind court delay and high litigation costs, as well as law enforcement, indicate

that the judicial system in China is far from the goal ofjustice and the modernization of law.

In this context, the current judicial reform should not only deal with the symptoms, but also

the roots of political and economic reform As commented by Edgardo Buscaglia: 'If the

judiciary is to provide the impartiality and efficiency necessary for public trust, a well defined

program for judicial reform needs to address the major causes of deterioration in the quality

of court services. This reform effort must address the root political, economic and legal

causes of an inefficient and inequitable judiciary and not simply deal with its symptoms.

Basic elements of judicial reform must include improvements in the administration of the

courts and case management practices; the redefinition and/or expansion of legal education

programs and training for students, lawyers and judges; the enhancement of public access to

justice through legal aid programs and legal education aimed at fomenting public awareness

of its rights and obligations in the courts; the availability of ADR mechanisms, such as

arbitration, mediation and conciliation; the existence of judicial independence (that is, budget

autonomy, transparency of the appointment process and job security) coupled with a

transparent disciplinary system for court officers; and the adoption of procedural reform

where necessary'.627 A country in transition, like China, needs an efficiently functioning

judiciary to defend the legitimate, and correct the illegitimate, relations among citizens,

627
Buscaglia, Edgardo, Law and Economics of Development, Encyclopedia of Law and Economics, Vol. II, de Geest and B.
Boukkaert (eds.X 1999, pp. 58S-S86; Also see homepage (http://encyclo.findlaw.com/).
Chapter 6 Summaiy and Policy Recommendation 243

regardless of their income levels, and safeguard the reform of the market economy. By
working together, the judicial system and ADR mechanisms can foster the much-needed
balance between equity and efficiency in the provision of justice
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Appendices 251

Appendices

Appendix-I (Questionnaire to the Parties)

Questionnaire 1

Part A. Court of First Instance


1. Time consumed from filing
until settlement (dismissed or
disposed)
2. Time consumed for
execution after judgment
3. Does the claimant/claimed (Yes) (No)
engage in a lawyer?
4. Type of the case (contract
disputes, tort cases, or
bankruptcy)
5. Parties involved
(individual, group, private,
state-owned firms?)
6. In case of retrial, how long
does it take?
7. Dispute Value

Part B. Appellate Court


1. Time consumed from
appeal until settlement
2. Total time consumed from
first filing until settlement
3. Lawyer engaged? (Yes) (No)
4. Dispute Value

Part C. Litigation Costs


1. Costs may be incurred according to the regulation of litigation cost (1989)
a) Litigation fee
b) Direct cost incurred, incl. collecting proof by the court, traveling costs, accommodation cost, food
etc. relating to the case (especially when the court and the appellee/appellor are in different
places)
c) Economic loss caused when asset is frozen, under guarantee etc. (optional)
d) Penalty incurred (by detaining in case of hurdling litigation)
e) Other direct costs charged by the court according to the regulation of litigation costs (1989)
252 Appendices
2. Costs not indicated in theregulation(1989)
a) Lawyer's fee
b) Other direct and indirect costs

Part D. Judicial costs (only for reference)


1. Costs of one judge in China (per year)
a) Salary
b) Welfare
c) Costs of assistants, Secretary
d) Housing
e) Children's advantage in schooling
f) Transportation (car, bus from the court)
g) Pension
h) Costs incurred in the court incl. building the building, maintenance, equipments, other material
cost
i) Other benefits

Cost per working hour will be also calculated based on the above calculation

2. Lawyer's cost (in 3 categories: 30,40 and 50 years old))


a) Cost of Secretary
b) Costs of assistants
c) Salary of a clerk
d) Office set-up
e) Traveling cost
f) Expense when attending seminars

Part E Views to the Duration of the Court and Cost


1. What do you think about the duration of the court? () very long () long () acceptable
2. What is your attitude towards litigation cost () very high () high () acceptable
3. Can you recover litigation fees prepaid to the court in case of winning () Yes () No
4. What is your view on law enforcement () very difficult () difficult () easy
5. Describe your experience in litigation.
Appendices 253

Appendix-II (Questionnaire to the Courts)

Questionnaire 2

A. What is the main reason causing court delay? If you think that the listed item is the main reason, which
affects the duration of the case, please place a cross in the square. You may choose several choices.

1. In the Process of Judgment


(1) Filing [ ]
(2) Pretrial Preparation [ ]
(3) Appearance and Hearing [ ]
(4) Meeting & Discussion of Collegial Panel [ ]
(5) Delivery of Court Orders/Decrees [ ]

2. Internal Factors
(1) Human Capital (Quality of Judges and their attitude towards judicial work) [ ]
(2) Waiting for Instruction from Higher Rank Official or Higher Court [ ]
(3) Waiting for the Decision of Collegial Panel and Trial Committee [ ]
(4) Signing of Legal Documents by President of the Court [ ]
(5) Other Reasons (budget, case management, court facilities and personnel autonomy
etc) [ ]

3. External Reasons
(1) Delay in Providing Evidences by the Parties [ ]
(2) Difficulty in Delivery of Legal Documents [ ]
(3) Bad Cooperation from Lawyers [ ]
(4) Complication of Cases [ ]
(5) Intervention of Administrative Bodies [ ]

B. The Effect of Regulation on Strict Implementation of Time Limit (2000), issued by the Supreme Court in
2000
1. Do you know the Regulation? [ ]
2. Do you think the Regulation has obvious effects to solve the problem of court delay?
(1) Very good effect [ ]
(2) Good effect [ ]
(3) It helps [ ]
(4) It does not have any effect in solving the problem of court delay. [ ]

2. What is your opinion regarding the implementation of the Regulation on Time Limit
(1) It is not easy [ ]
(2) Difficult [ ]
(3) Very Difficult [ ]
254 Appendices
3. If you think it is difficult to implement the Regulation on Time Limit, what are the main difficulties?
Please make a cross in the square. You may have multiple choices.
(1) The calculation on the time of filing and settlement [ ]
(2) The application for prolongation of time limit [ ]
(3) The assignment of cases in the event of appeal [ ]
(4) Enforcement of Court Orders/Decrees [ ]

4. What is your opinion towards court delay?


(1) Very serious before 2000 [ ]
(2) Still very serious [ ]
(3) Big improvement after the promulgation of Regulation on Time Limit [ ]
Appendices 255

Appendix III (Judicial Statistics from 1988 to 2000)

Remarks:
Sources from China Law Year Books with yearly filings and dispositions in the courts.
The total number include pending cases of previous years.
With respect to the enforcement of judgments, there is no statistics about filings, only the number of
cases settled is available (since 1993).
In this study, civil cases include the number of 'civil cases' and 'economic cases' as indicated in the
tables.
Cases under Judicial Supervision are retrial cases.

Judicial Statistics (1988)

Table 1988-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1988

Cases Filing Settled Unsettled

Trial Cases 2290624 2226043 263268

Appeal Cases 160660 157118 24726

Judicial Supervision 112368 136164 38032

Total 2563652 2519325 326026

Table 1988- 2 Total Trial Cases in 1968


Percentage of
Cases Filing Settled Unsettled Settlement Ratio (%)
total filing

Criminal 313306 13.68 312475 13573 96.09

Civil 1455130 63.53 1419056 166135 89.52

Economic 508965 22.22 481923 81588 85.52

Administrative 8573 0.37 8029 963 89.29

Traffic 4650 0.2 4560 1009 81.88

Total 2290624 100 2226043 263268 89.42

Table 1988- 3 Total Appeal Cases in 1988


No. of cases and the type of settlement
Cases Filing
Settlement Maintained Reversed Retrial Withdrawal Others Unsettled

Criminal 46432 46430 33884 6603 3402 2160 381 2627

Civil 90430 87961 42400 20045 7664 5939 11643 17936

Economic 21311 20674 7863 5944 2554 976 3337 3968

Administrative 2356 2218 1573 371 152 71 51 172


Traffic 131 125 40 26 21 8 30 23
Total 160660 157408 85760 32989 13793 9154 15442 24726
256 Appendices

Judicial Statistics (1989)

Table 1989-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1989

Cases Filing Settlement

Total 3209593 3182733

Trial Cases 2913515 2882103

Appeal Cases 196257 191132

Judicial Supervision 99821 109498

Table 1989-2 Total Trial Cases in 1989

Percentage of
Cases Filing Settled Unsettled Settlement Ratio (%)
total filing

Criminal 392564 13.74 389597 16595 95.84

Civil 1815385 62.31 1808538 174255 91.21

Economic 690765 23.71 669443 103300 86.63

Administrative 9934 0.34 9742 1169 89.29

Maritime 4867 0.17 4783 1079 81.59

Total 2913515 100 2882103 296398 90.71

Table 1989-3 Total Appeal Cases in 1989

No. of cases and the type of settlement

Cases Filing Settlement Maintained Reversed Retrial Withdrawal Others

Criminal 51758 51294 37657 7410 3344 2393 490

Civil 112500 109614 53393 25269 9547 7203 14202

Economic 28959 27216 10% 1 7684 3171 1133 4267

Administrative 2908 2888 1875 227 229 462 95

Traffic 132 120 52 31 15 5 17

Total 196257 191132 103938 40621 16306 11196 19071

Judicial Statistics (1990)

Table 1990-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1990

Cases Filing Settlement

Total 3211758 3216612

Trial Cases 2916774 2921806

Appeal Cases 213000 208109

Judicial Supervision 81984 86397


Appendices 257

Table 1990-2 Total Trial Cases


Percentage of
Cases Filing Settled Unsettled Settlement Ratio (%)
total filing

Criminal 459656 15.76 457552 16437 96.53

Civil 1851897 63.49 1849728 157602 92. 15

Economic 588143 20. 16 598317 79001 88.34

Administrative 13006 0.45 12040 2030 85. 57

Maritime 4072 0. 14 4169 890 82. 41

Total 2916774 100 2921806 255960 91.95

Table 1990-3 Total Appeal Cases in 1990


No. of cases and the type of settlement
Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Others

Criminal 57930 57048 41681 8579 3730 2508 550


Civil 116362 114401 54352 27550 9970 8662 13867

Economic 35103 33476 13176 9957 3909 1735 4699

Administrative 3431 3325 2192 662 258 102 111


Traffic 174 159 60 45 18 6 30
Total 213000 208409 111461 46793 17885 13013 19257

Judicial Statistics (1991)

Table 1991-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1991
Cases Filing Settlement Unsettled

Trial Cases 290185 2950880 233673

Appeal Cases 229690 230864 32787

Judicial Supervision 83573 84538 22315

Total 3214948 3266282 288775

Table 1991-2 Total Trial Cases in 1991


Percentage of
Cases Filing Settled Unsettled Settlement Ratio (%)
Filing

Criminal 427840 14.74 427607 18263 95.90

Civil 1880635 64.81 1910013 142334 93.06

Economic 566592 19.53 587148 70177 89. 32

Administrative 25667 0.89 25202 2526 90.89

Maritime 951 0.03 910 373 70.93

Total 2901685 100 2950880 233673 92. 66


258 Appendices
Table 1991-3 Total Appeal Cases in 1991
No. of cases and the types of settlement
Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Others Unsettled

Criminal 56125 55817 40312 8728 3869 2260 648 4187

Civil 127113 128396 63487 30522 10474 10024 13889 21037

Economic 39467 39891 16007 12127 4345 2228 5184 7017

Administrative 6930 6708 4381 1385 543 224 175 515


Maritime 55 52 17 22 3 2 8 31
Total 229690 230864 124204 52784 19234 14738 19904 32787

Judicial Statistics (1992)

Table 1992-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1992
Cases Filing Settlement

Trial Cases 3051157 3049959

Appeal Cases 231907 236800

Judicial Supervision 81926 83226

Total 3364990 3369985

Table 1992-2 Total Trial Cases in 1992

Percentage of Ratio of settled cases


Cases Filing Settled Unsettled
Filing (%)
Criminal 422991 13.86 424440 16459 96.67

Civil 1948786 63.88 1948949 141212 93.24

Economic 650601 21.32 648018 72286 89.96

Administrative 27125 0.89 27116 2520 91.5

Maritime 1654 0.05 1436 593 70.77

Total 3051157 100 3049959 233070 92.9

Tibk 1992-3 Total Appeal Cases la 1992

No. of cases and the types of settlement


Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Return Mediation Others

Criminal 55484 55579 39402 9424 3897 2277 0 0 579

Civil 125096 129079 62271 28350 10405 10212 623 15507 1711

Economic 42931 43791 17225 11361 4525 2671 1355 5374 1280

Administrative 8334 8273 5333 1332 687 397 0 0 524

Maritime 62 78 37 15 12 5 3 4 2

Total 231907 236800 124268 50482 19526 15562 1981 20885 4096
Appendices 259

Judicial Statistics (1993)

Table 1993-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1993

Cases Filing Settlement

Trial Cases 3414845 3406467

Appeal Cases 215408 219628

Judicial Supervision 69531 73121

Total 3699784 3699216

Table 1993-2 Total Trial Cases in 1993

Cases Filing Percentage of Filing Settlement

Criminal 403267 11.81 403177

Civil 2089257 61.18 2091651

Economic 894410 26.19 883681

Administrative 27911 0.82 27958

Total 3414845 100 3406467

Table 1993-3 Total Appeal Cases in 1993

No. of cases and the type of settlement


Cases Filing Settlement
Maintained Reversed Retrial fithdrawal Mediation Others

Criminal 46947 47602 33996 7382 3520 2066 0 638

Civil 114997 118638 56904 26115 9476 9267 14544 2333

Economic 46038 45804 18166 10967 3983 3087 5523 4078

Administrative 7426 7584 4859 1343 555 370 0 457

Total 215408 219628 113925 45807 17533 14790 20067 7506

Table 1993-4 Total Number of Judgments emfbreed In 1993

Total enforced Relating to Applied by


Civil Economic Administrative Others
cases criminal cases administration

912354 471844 314107 20580 10711 88147 6965

Judicial Statistics (1994)

Table 1994-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1994

Cases Filing Settlement

Trial Cases 3955475 3943095

Appeal Cases 241129 239938

Judicial Supervision 64377 67288

Total 4260981 4250321


260 Appendices
Table 1994-2 Total Trial Cases in 1994

Cases Filing Percentage of Filing Settlement

Criminal 482927 12.21 480914

Civil 2383764 60.26 2382174

Economic 1053701 26.64 1045440

Administrative 35083 0.89 34567

Total 3955475 100 3943095

Tabic 1994-3 Total Appeal Cases in 1994

No. of cases and the type of settlement


Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others

Criminal 53161 52579 37819 7862 3810 2275 0 823

Civil 122099 123005 59855 26268 9248 10437 14682 2515

Economic 58170 56682 22479 12469 4461 4385 6490 6398

Administrative 7699 7672 4974 1196 673 429 0 500

Total 241129 239938 125127 47785 18092 17526 21172 10236

Table 1994-4 Total Number of Judgments eilorced l i 1994

Total enforced Relating to Applied


Civil Economic Administrative Others
cases criminal cases by administration

1085040 546683 357574 22800 11580 135355 11048

Judicial Statistics (1995)

Table 1995-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1995

Cases Filing Settlement

Trial Cases 4545676 4533551

Appeal Cases 272792 271741

Judicial Supervision 70885 70865

Total 4889353 4876157

Table 1995-2 Total Trial Cases in 1995

Cases Filing Percentage of Filing Settlement

Criminal 495741 10.91 496082

Civil 2718533 59.80 2714665

Economic 1278806 28.13 1271434

Administrative 52596 1.16 51370

Total 4545676 100.00 4533551


Appendices 261
Ttbk 19954 Total Appeal Cases ia 1995

No. of cases and the type of settlement


C&S68 Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others

Criminal 53576 53942 38786 7989 4140 2127 0 900

Civil 139298 138585 66759 29865 10865 11313 16418 3365

Economic 70224 69678 26211 15333 5687 5704 7667 9076

Administrative 9694 9536 6086 1408 676 658 0 708

Total 272792 271741 137842 54595 21368 19802 24085 14049

Table 1995-4 Total Number of Judgments enforced in 1995


Total enforced Relating to Applied by
Civil Econonic Administrative Others
cases criminal cases administration
1337168 645421 450677 27510 13664 188584 11312

Judicial Statistics (1996)

Table 1996-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1996
Cases Filing Settlement
Trial Cases 5312580 5285171
Appeal Cases 323995 321962
Judicial Supervision 76094 75230
Total 5712669 5682363

Table 1996-2 Total Trial Cases in 1996


Cases Filing Percentage of Filing Settlement
Criminal 618826 11.65 616676
Civil 3093995 58.24 3084464
Economic 1519793 28.61 1504494
Administrative 79966 1.5 79537
Total 5312580 100 5285171

Table 1996-3 Total Appeal Cases In 1996


No. of cases and the type of settlement
Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others

Criminal 68038 67087 48948 9917 4614 2521 0 1087

Civil 159846 159702 77661 34787 12422 13122 17650 4060

Economic Dispute 84657 83808 31906 18307 6916 7331 8386 10962

Administrative 11454 11365 7206 1951 827 702 0 679

Total 323995 321962 165721 64962 24779 23676 26036 16788


262 Appendices
Table 1996-4 Total Number of Judgments enforced in 1996
Total Applied by
Administrativ Relating to
enforced Civil Economic administratio Others
e criminal cases
cases n
1687790 788577 577970 31186 15934 256897 17226

Judicial Statistics (1997)

Table 1997-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1997
Cases Filing Settlement
Trial Cases 5288379 5249460
Appeal Cases 347651 340896
Judicial Supervision 86425 83512
Total 5722455 5673868

Table 1997-2 Total Trial Cases in 1997


Cases Filing Percentage of Filing Settlement
Criminal 436894 8.26 440577
Civil 3277572 61.98 3242202
Economic 1483356 28.05 1478139
Administrative 90557 1.71 88542
Total 5288379 100 5249460 j

Table 1997-3 Total Appeal Cases in 1991


No. of cases and the type of settleaent
Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others
Criminal 64755 61548 41216 11957 4716 2427 0 1232
Civil 182766 177317 86129 39058 14552 15757 17664 1157
Economic 87376 86347 32596 19860 7646 8001 7799 10445
Administrative 12754 12684 7603 2105 937 1143 0 896
Total 347651 340896 170544 72980 27851 27328 25463 16730

Table 1997-4 Total Number of Judgments enforced in 1997


Total
Relating to Applied by
enforced Civil Economic Administrative Others
criminal cases administration
cases
1727439 823420 553882 40170 17991 264936 27040
Appendices 263
Judicial Statistics (1998)

Table 1998-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1998
Cases Filing Settlement
First trial 5410798 5395039
Appeal Cases 380274 379206
Judicial Supervision 89687 90029
Total 5880759 5864274

Table 1998-2 Total Trial Cases in 1998


Cases Filing Percentage of Filing Settlement
Criminal 482164 8.91 480374
Civil 3375069 62.38 3360028
Economic 1455215 26.89 1456247
Administrative 98350 1.82 98390
Total 5410798 100 5395039

Table 1998-3 Total Appeal Cases ia 1998

No. of cases and the type of settlement


Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others

Criminal 70263 70767 49603 11369 5603 2658 886 648


Civil 207186 204958 100865 44383 18825 17539 17620 5276

Economic 88495 89261 33372 20466 9148 8795 7328 10153

Administrative 14330 14220 7876 2446 1278 933 38 1649

Total 380274 379206 191716 78663 34854 29925 25872 18176

Table 19914 Total Number of Judgments enforced in 1998

Total enforced Administrative - Legal


Civil Economic Administrative Criminal Arbitral Others
cases non-litigation documents

2078038 961938 696710 44373 43771 297898 13233 6735 13380

Judicial Statistics in (1999)

Table 1999-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 1999
Cases Filing Settlement
Trial Cases 5692434 5698705
Appeal Cases 438313 436804
Judicial Supervision 98765 96793
Total 6229512 6232302
264 Appendices
Table 1999-2 Total Trial Cases in 1999
Percentage of total
Cases Filing Settlement
f iling
Criminal 540008 9.49 539335
Civil 3519244 61.82 3517324
Economic 1535613 26.98 1543287
Administrative 97569 1.71 98759
Total 5692434 100 5698705

Table 1999-3 Total Appeal Caws i i 1999

No. of cases and the type of settlement


Cases Filing Settlement
Maintained Reversed Retrial fithdrawal Mediation Others

Criiinal 78862 78803 56086 11734 6026 3280 1088 589


Civil 246241 244550 124467 50435 21639 21399 19685 6925

Econcoic Dispute 95165 95379 36978 20203 9581 10336 7436 10845

Administrative 18405 18702 10222 2995 1743 1296 38 1778

Total 48313 436804 227753 85067 38989 36311 28247 20137

Tsbk 19994 Total Number of J u d g e s enforced ii 1999

Administrative -
Total enforced cases Civil Economic Administrative Crininal Arbitral Others
non-litigation

2645341 1227192 899624 35819 58160 362863 30234 31449

Judicial Statistics (2000)

Table 200O-1 Trial Cases, Appeal Cases and Retrial Cases (Judicial Supervision) by the People's Courts in 2000
Cases Filing Settlement
Trial Cases 5356294 5380611
Appeal Cases 466827 469545
Judicial Supervision 95290 97909
Total 5918411 5948065

Table 2000-2 Total Trial Cases in 2000


Percentage of total
Cases Filing Settlement
filing
Criminal 560432 10.46 560111
Civil 3412259 63.71 3418481
Economic 1297843 24.23 1315405
Administrative 85760 1.6 96614
Total 5356294 100 5380611
Appendices 265
labia 2000-3 Total Appeal Cut! m 2000
No. of cases and the type of settlement
Cases Filing Settlement
Maintained Reversed Retrial Withdrawal Mediation Others

Criminal 87103 86619 61572 12792 6227 4190 1219 619


Civil 261800 86619 133114 54127 23652 24387 21210 8308

Economic Dispute 98271 98724 38789 20801 9955 10794 7225 11160

Administrative 19743 19404 10693 3060 1654 1296 580 2643

Total 466827 469545 244168 90780 41488 40667 29712 22730

Table 2000-4 Total Number of Judgments enforced cam in 2000


Total
Administrative ~
enforced Civil Economic Administrative Criminal Arbitral Others
non-litigation
cases

2639066 127977 844723 28811 63344 361961 43160 25090